EX-99.1 2 jbgs-20220503xex99d1.htm EX-99.1

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Quarterly Investor Package


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JBGS Divider


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Management Letter

May 3, 2022

To Our Fellow Shareholders:

Throughout the first quarter we continued to see signs of strength as our market reopened. Residents and workers alike are returning to urban environments, particularly those offering a strong base of amenities rich in experiences and opportunities to socialize. Daily physical occupancy is steadily rising, particularly in National Landing, where companies continue to bring employees back to the office – in some cases 5 days a week – revitalizing the streetscape. During the quarter, we accelerated the pace of our capital recycling initiatives, advancing our overall portfolio transformation to majority multifamily with a significant concentration in National Landing. While Amazon and tech-driven demand continues to grow, global unrest is driving a resurgence of defense-related activity. The importance of our National Landing portfolio’s proximity to the Department of Defense and The Pentagon, as well as our significant investments in next-generation digital infrastructure, have the potential to drive significant future demand ahead of these tailwinds. The highlights from this quarter align well with our focus on maximizing long-term net asset value per share.

Amazon HQ2 surpassed hiring targets for the 3rd straight year: Metropolitan Park topped-out construction and remains on track for a 2023 delivery. Phase two, Pen Place, received final entitlement approvals, and we expect to close on its $198 million sale to Amazon in the second quarter. Additionally, in April, Amazon announced 5,000 employees hired at HQ2 with nearly 4,000 current job openings, already surpassing its year-end 2022 hiring commitment to the Commonwealth of Virginia. This pace of hiring exceeds expectations and emphasizes the need for the new housing offerings featured prominently in our growth pipeline.

Virginia Tech’s $1 billion Innovation Campus launched an artificial intelligence and machine learning partnership with Amazon. The new initiative will target advanced research and innovation initiatives. The campus continues to attract funding from STEM employers (technology, defense, and aerospace), including Amazon, Boeing, and Northrop Grumman, and added additional academic faculty resources in April this year.

Two mission-critical placemaking amenities broke ground in National Landing. “Dining in the Park” and the totally re-imagined “Water Park” commenced construction. Together they will deliver two new outdoor destinations to National Landing by mid-2023, representing 11 new retailers and over 3.5 acres of dramatically enhanced outdoor public space. These projects will continue our transformation of National Landing into the Capital region’s premier live-work-play destination.

$845 million of capital recycling transactions closed year-to-date representing an average capitalization rate of 5.1%. These transactions include the sale of the Universal Buildings, the sale of a 99-year leasehold interest in a future development asset located in Reston, VA, and our unconsolidated joint venture with affiliates of Fortress Investment Group LLC (“Fortress”) to recapitalize a 1.6 million square foot non-core office portfolio and land parcels. Since the beginning of 2021, we have closed over $937 million of capital recycling transactions, which deleveraged our balance sheet and created capacity for accretive investments, including share repurchases. The $198 million of proceeds from the sale of Pen Place to Amazon, which is expected to close in the second quarter of this year, is not included in these amounts as it was contracted prior to 2021.

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JBG SMITH Overview

We own and operate urban mixed-use properties concentrated in what we believe are the highest growth submarkets of the historically recession-resilient Washington, DC metro area.

Our concentration in these submarkets, our substantial portfolio of operating and development opportunities, and our market-leading platform position us to capitalize on the significant growth we anticipate in our target submarkets.

68% of our holdings are located directly across the Potomac River from Washington, DC in Northern Virginia’s National Landing submarket, where Amazon’s new 5 million+ square foot headquarters and Virginia Tech’s $1 billion Innovation Campus are under construction.

The Commonwealth of Virginia has incentivized Amazon to bring up to 38,000 new jobs to National Landing, which, based on data from the National Landing Business Improvement District provided in November 2018, would increase the daytime population in the submarket from approximately 50,000 people to nearly 90,000 people in the future, representing dramatic growth of nearly 80%. Amazon announced its hybrid return-to-the-office policy in late 2021, requiring employees to live locally and within commuting distance of the office for at least 11 months of the year. This policy aligns well with Amazon’s aggressive hiring in the current competitive job market.

At its Seattle headquarters, approximately 20% of Amazon’s employees live within walking or biking distance to work, and Amazon provides $350 monthly stipends to employees who bike to HQ2. Using Amazon’s Seattle employee patterns and preferences as proxies for behaviors that might be expected at HQ2, 20% of employees, or up to 7,600 Amazon employees, could be expected to live within the National Landing submarket. This potential influx of demand for additional multifamily units aligns well with our plans to deliver new multifamily supply to the submarket. In addition to the 1,583 units currently under construction in National Landing, our Near-Term Development Pipeline could add as many as 2,150 new multifamily units to National Landing.

While we control most of the existing office supply and unencumbered development density in National Landing, the balance of our portfolio is concentrated in what we believe are the highest growth submarkets in the Washington, DC metro region, the majority of which are within a 20-minute commute of the growing technology ecosystem in National Landing.

We believe the strong technology sector tailwinds created by Amazon, the Virginia Tech Innovation Campus, national/international defense and security needs, and our National Landing digital infrastructure initiatives, including our 5G rollout and other connectivity enhancements with best-in-class partners, will drive substantial long-term net asset value per share growth.

Our successful track record and well-established platform position us to maximize the value of our Development Pipeline through development or opportunistic land sales, ground leases, and/or recapitalizations with private investors.

As of the end of the first quarter, we had two multifamily developments under construction in National Landing – 1900 Crystal Drive (808 units) and 2000/2001 South Bell Street (775 units). Since our formation in 2017, we have successfully delivered 2.8 million square feet of mixed-use development, with estimated stabilized yields of 6.5% for multifamily assets and 7.0% for commercial assets.

Over the past year, we advanced the design and entitlement of 100% of our Development Pipeline, over 70% of which is in National Landing. Our 8.6 million square foot Development Pipeline (excluding non-core assets), 84% of

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which is multifamily, includes both a 3.5 million square foot Near-Term Development Pipeline and a 5.1 million square foot Future Development Pipeline. Our Near-Term Development Pipeline comprises what we believe to be the most accretive and strategic development opportunities in our growth pipeline – those which have the potential to commence construction over the next 36 months, subject to receipt of final entitlements, completion of design, and market conditions. Within our Future Development Pipeline, we have fully entitled 0.5 million square feet and are actively advancing design and entitlement on an additional 4.6 million square feet. We believe that advancing entitlement and design of these assets is the best way to maximize optionality and value, either through internal development, land sales, ground lease structures, and/or recapitalizations with third parties.

Our capital allocation strategy is to shift the majority of our portfolio to multifamily and concentrate our office portfolio in National Landing.

We expect our portfolio shift to majority multifamily will occur through a combination of investing in multifamily assets (existing and development) and opportunistically divesting non-core office and land assets. Since our formation, we have sold $2.6 billion of non-core assets and invested $366 million into multifamily acquisitions, $788 million into the development of multifamily assets, and committed an additional $569 million to new assets currently under construction.

Capital Allocation

Our capital allocation strategy is grounded in our primary goal of maximizing long-term net asset value per share growth. This strategy entails two key elements: repositioning our portfolio to concentrate our office in National Landing; and transitioning to a majority multifamily portfolio that continues to expand in high-growth, amenity-rich DC metro submarkets through acquisitions and development. Opportunistic dispositions of income-producing office assets outside of National Landing, as well as the sale, ground lease, or joint venture of non-core land holdings, serve as an important source of NAV-priced capital to fund our strategy.

We set a target to market $1 billion of non-core office and land assets in 2022 and are well on our way to achieving this goal with $845 million closed year-to-date, representing an average capitalization rate of approximately 5.1%. This amount includes three transactions that recently closed in April: (i) a $580 million strategic joint venture with Fortress, encompassing a 1.6 million square foot non-core office and land portfolio (7200 Wisconsin Avenue in Bethesda, MD, 1730 M Street in Washington, DC, RTC West I, II and III in Reston, VA, and Courthouse Plaza I and II in Arlington, VA); (ii) a $228 million sale of the Universal Buildings, two Washington, DC office buildings totaling 660,000 square feet; and (iii) a $60 million sale of a 99-year leasehold interest in a future development asset located in Reston, VA. The sales represent an average capitalization rate of approximately 5.8% on the income-producing office assets and approximately $33 PSF on the 2.5 million square feet of land assets. Proceeds to date have been utilized to deleverage our balance sheet and create capacity for accretive investment opportunities including, where applicable, 1031 exchanges into multifamily acquisitions and development. The $198 million of proceeds from the sale of Pen Place to Amazon, which is expected to close in the second quarter of this year, is not included in these amounts as it was contracted prior to 2021. Barring any significant changes in market conditions, we intend to market at least an additional $400 million in 2022.

This quarter we invested $34 million in ongoing under-construction projects, including 1900 Crystal Drive and 2000/2001 South Bell Street, representing 1,583 new multifamily units developed to an expected 6% yield on cost. As with all of our development projects, these assets have guaranteed maximum price contracts that were priced during the height of the pandemic, which yielded construction costs below 2019 levels and which pre-dated recent inflationary cost increases. With 3,605 units in our Near-Term Development Pipeline, we continue to monitor construction costs and overall market conditions to ensure that we maintain our disciplined capital allocation standards.

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Finally, our capital allocation strategy demands that we seek investment opportunities with the highest potential risk-adjusted returns, which may include share repurchases. When our stock trades at a material discount to NAV, share repurchases are one of the most accretive uses of capital available to us. During the first quarter, we repurchased 3.3 million shares at a weighted average price per share of $27.86, totaling $93.1 million.

Financial and Operating Metrics

For the three months ended March 31, 2022, we reported Core FFO attributable to common shareholders of $42.7 million, or $0.34 per diluted share. Same Store NOI for the quarter increased 12.0% year-over-year to $88.5 million and NOI for our operating portfolio increased by 14.3%. Our operating portfolio ended the quarter at 88.1% leased and 86.0% occupied. Excluding assets sold or recapitalized subsequent to quarter end, Same Store NOI for the quarter increased 14.9% year-over-year, and our operating portfolio ended the quarter at 89.7% leased and 87.8% occupied. For second generation leases, the rental rate mark-to-market was negative 1.1%. As we have previously mentioned, our mark-to-market will vary from quarter-to-quarter depending on the leases signed.

Net Debt/Annualized Adjusted EBITDA would have been 7.6x in Q1 2022 and Net Debt/Total Enterprise Value would have been 30.1%, after adjusting for net proceeds from the sales and recapitalizations which closed subsequent to quarter end, and $198 million of gross proceeds from the sale of Pen Place that is expected to close in Q2 2022.

For more information on our Q1 2022 results as well as adjustments related to dispositions and recapitalizations that occurred subsequent to quarter end, please refer to our Q1 2022 supplemental information package.

Operating Portfolio

Office Trends

Our office portfolio performance remained relatively stable in the first quarter. While we saw sizeable leasing toward the end of last year, tour activity in January and February experienced a modest pull-back in velocity due to the impact of Omicron, as well as typical winter seasonality. Accordingly, we executed 210,000 square feet of leases, 45% of which represented new leasing, and occupancy ended the quarter at 83.3%, up 40 basis points quarter-over-quarter. Additionally, with the sale of our Universal Buildings in April, we successfully relocated one of our anchor credit tenants from the Universal Buildings to another JBG SMITH-owned office asset located in Washington, DC, leveraging our capital recycling transactions for new leasing. Finally, our commercial parking revenue continues to improve as more tenants return to the office, reaching 65% of pre-pandemic levels on an annualized basis.

Heading into the second quarter, we see an upward trend in tour activity, specifically among defense contractors and digital infrastructure-related tenant prospects. Actual and anticipated increases in domestic and foreign defense spending have generated a flurry of contractor and agency activity that bodes well for future appropriations and demand in the years to come. Additionally, our digital infrastructure advancements in National Landing continue to generate a significant amount of inbound interest with a growing list of prospects interested in establishing a presence with access to both the physical and digital amenities we are building. As employers continue to re-open their offices, even under hybrid and flexible schedules, we expect new leasing activity to follow. In today’s hybrid work environment, we believe peak occupancy, which generally occurs on Tuesday, Wednesday, and Thursday, is one of the best barometers in gauging true utilization of office space. Recent Kastle data reported daily physical occupancy in our National Landing portfolio steadily increasing over the last several months, with April achieving peak occupancy days that were 49% of pre-pandemic levels, up 68% since the lows of January.

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Market-Wide Trends (based on JLL Q1 2022 reporting)

The rate of negative net absorption across the DC metro area continued to slow through the first quarter to negative 165,000 square feet, representing a 58% reduction from the negative 395,000 square feet reported for the fourth quarter. With 83% of our commercial portfolio in Northern Virginia, we noted in the fourth quarter that the declining rate of negative net absorption for Northern Virginia could signal that the market has found its bottom. We saw that trend appear to play out as Northern Virginia experienced positive net absorption of 93,000 square feet in the first quarter – its first gains since the start of the pandemic and a stark contrast to DC’s continued losses. We believe that outperformance in Northern Virginia is likely to continue, particularly given the growth potential in the technology and defense sectors which are significant demand drivers in that market. The war in Ukraine has not only driven a significant uptick in United States defense spending off near-historic postwar lows (3.9% of GDP in 2021 based on Federal Reserve data), but has also spurred increases among our European allies, most of whom spent less than 2% of their GDPs on defense in 2021 according to NATO. Additionally, The Pentagon’s FY 2022 budget request included $15 billion in science and technology funds. We believe the increase in defense spending, both at home and abroad, will likely inure to the benefit of Northern Virginia broadly, and National Landing more specifically, as it is located at the intersection of defense and technology.

Multifamily Trends

Even during the customarily slower winter leasing season, we saw demand for our multifamily assets continue to improve. Our portfolio ended the quarter at 91.6% occupied. Excluding our newly delivered asset, 8001 Woodmont, our portfolio ended the quarter at 92.9% occupied. Strong market rent growth has left us with in-place rents 8.5% below asking rents, supporting an embedded growth opportunity from the expiration of several jurisdictional restrictions on rent increases as leases roll to market during our prime summer season. Of note, for March lease expirations, we were able to achieve an increase in renewal rents exceeding 8% while also maintaining an above-average renewal rate across our portfolio. Additionally, there has been a dramatic burn-down in pandemic-related concession packages, with no concessions being offered in many of our key submarkets.

Market-Wide Trends (based on CoStar and Apartment List data)

Our market continues to see rents above pre-pandemic levels. Data from Apartment List show asking rents across the DC metro are up 5.5% from Q1 2020 to Q1 2022 and 13.1% from Q1 2021 to Q1 2022. This strong rent growth, coupled with very high occupancies, signals robust demand in our market against a backdrop of relatively low supply growth. Based on data from CoStar and UrbanTurf, expected average annual deliveries through 2022 and 2023 (7,400 units per year) will be fewer than we saw on average from 2010 through 2019 (over 9,000 units per year). These estimates are based on units currently under construction and do not account for any impact of rising interest rates or construction costs on developers’ ability to start new projects over the next few years.

Environmental, Social, and Governance

In April, we released our annual environmental, social, and governance (ESG) report highlighting our accomplishments, key performance metrics, and our ESG management strategy. This report details all our ESG achievements over the past year, including attaining carbon neutrality across our operating portfolio, deploying $34 million of financing to preserve 459 affordable housing units through the Washington Housing Initiative (WHI) Impact Pool, and strengthening the gender balance and diversity of our Board of Trustees to include four women, including one woman of color. We believe that strong environmental sustainability, social responsibility, and corporate governance practices are essential to maximizing long-term net asset value per share, and we plan to continue to be a market leader in these initiatives. We encourage you to access our annual ESG report by visiting our website at https://www.jbgsmith.com/about/sustainability.

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In March, the WHI Impact Pool provided financing to the Washington Housing Conservancy and Montgomery Housing Partnership for its acquisition of Earle Manor, a 140-unit multifamily asset located in Wheaton, Maryland. With the addition of this asset, the WHI Impact Pool has financed 1,750 affordable housing units across five jurisdictions, including 825 units with Amazon, all of which are managed by JBG SMITH. This satisfies almost 60% of our goal to finance 3,000 units by 2028.

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Volatility continues to be the watchword for today’s world, whether it be work habits, geopolitics, public health, or financial markets. Volatility notwithstanding, we have successfully advanced our most important strategic priorities with no loss of momentum. Our physical and digital transformation of National Landing is well underway, and we are delivering the exact kind of amenity-rich, connected environment consumers and employers will demand in a re-opened world. Amazon, Virginia Tech, and The Pentagon are building existing and new demand tailwinds that we expect to harness for years to come. As we advance the design and entitlement of our growth pipeline to capitalize on these trends, we are pleased to have exceeded our expectations in capital recycling and funding of these exciting opportunities. In the face of volatility, we plan to continue to maximize the opportunities before us and are fortunate to have the financial strength, the team, and the capabilities to do so.

Finally, please look out for our latest investor presentation, which will be posted on our website on May 9th at: https://investors.jbgsmith.com/investor-relations/investor-materials/presentations/default.aspx.

Thank you for your continued trust and confidence.

Sincerely,

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W. Matthew Kelly

Chief Executive Officer

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Section Two – Earnings Release


FOR IMMEDIATE RELEASE

    

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Earnings Release

CONTACT

Barbat Rodgers

Senior Vice President, Investor Relations

(240) 333-3805

brodgers@jbgsmith.com

JBG SMITH ANNOUNCES FIRST QUARTER 2022 RESULTS

Bethesda, MD (May 3, 2022) - JBG SMITH (NYSE: JBGS), a leading owner and developer of high-quality, mixed-use properties in the Washington, DC market, today filed its Form 10-Q for the quarter ended March 31, 2022 and reported its financial results. Additional information regarding our results of operations, properties and tenants can be found in our First Quarter 2022 Investor Package, which is posted in the Investor Relations section of our website at www.jbgsmith.com. We encourage investors to consider the information presented here with the information in that document.

First Quarter 2022 Highlights

For the three months ended March 31, 2022, net loss, Funds From Operations ("FFO") and Core FFO attributable to common shareholders were:

FIRST QUARTER COMPARISON

in millions, except per share amounts

Three Months Ended

March 31, 2022

March 31, 2021

Amount

Per Diluted Share

Amount

Per Diluted Share

Net loss

$

-

$

-

$

(20.7)

$

(0.16)

FFO

$

51.3

$

0.40

$

42.3

$

0.32

Core FFO

$

42.7

$

0.34

$

49.6

$

0.38

Annualized Net Operating Income ("NOI") for the three months ended March 31, 2022 was $370.7 million, compared to $345.8 million for the three months ended December 31, 2021, at our share.
Same Store NOI ("SSNOI") at our share increased 12.0% year-over-year to $88.5 million for the three months ended March 31, 2022.
oThe increase in SSNOI for the three months ended March 31, 2022 was substantially attributable to (i) higher occupancy and rents, and lower concessions in our multifamily portfolio and (ii) cash basis tenants paying previously deferred rent, a decrease in uncollectible operating lease receivables and an increase in parking revenue in our commercial portfolio.
NOI for our operating portfolio increased 14.3% year-over-year to $92.4 million, and Adjusted EBITDA decreased 14.9% year-over-year to $67.9 million for the three months ended March 31, 2022.

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Operating Portfolio

The operating commercial portfolio was 85.2% leased and 83.3% occupied as of March 31, 2022, compared to 84.9% and 82.9% as of December 31, 2021, at our share.
The operating multifamily portfolio was 94.1% leased and 91.6% occupied as of March 31, 2022, compared to 93.6% and 91.8% as of December 31, 2021, at our share. Our multifamily portfolio in-service assets were 95.5% leased and 92.9% occupied as of March 31, 2022, compared to 95.4% and 93.4% as of December 31, 2021, at our share.
Executed approximately 210,000 square feet of office leases at our share during the three months ended March 31, 2022, comprising approximately 23,000 square feet of first-generation leases and approximately 187,000 square feet of second-generation leases, which generated a 9.0% rental rate increase on a GAAP basis and a 1.1% rental rate decrease on a cash basis.

Disposition and Recapitalization Activity Subsequent to March 31, 2022

On April 1, 2022, we sold the Universal Buildings, commercial assets located in Washington DC, for $228.0 million.
On April 13, 2022, we formed an unconsolidated real estate venture with affiliates of Fortress Investment Group LLC ("Fortress") to recapitalize a 1.6 million square foot office portfolio and land parcels valued at $580.0 million comprising four wholly owned commercial assets (7200 Wisconsin Avenue, 1730 M Street, RTC-West/RTC-West Trophy Office/RTC-West Land and Courthouse Plaza 1 and 2), which were classified as assets held for sale as of March 31, 2022. Fortress contributed $131.0 million for a 66.5% interest in the venture. In connection with the transaction, the real estate venture obtained mortgage loans totaling $458.0 million secured by the properties, of which $402.0 million was drawn at closing. We will provide asset management, property management and leasing services to the venture.
On April 29, 2022, we sold a 99-year term leasehold interest in a future development asset located in Reston, VA.
Excluding assets sold and recapitalized subsequent to March 31, 2022:
oThe operating commercial portfolio would have been 87.0% leased and 85.5% occupied as of March 31, 2022, at our share.
oSSNOI would have increased 14.9% to $76.8 million for the three months ended March 31, 2022 compared to the three months ended March 31, 2021.
oPlease see adjusted portfolio metrics on page 11 of the Supplemental Information for more information.

Development Portfolio

Under-Construction

As of March 31, 2022, we had two multifamily assets under construction consisting of 1,583 units at our share.
As previously announced, we commenced construction on 2000 South Bell Street and 2001 South Bell Street ("2000/2001 South Bell Street") in National Landing, a 775-unit multifamily asset.

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Near-Term Development Pipeline

As of March 31, 2022, we had nine near-term development pipeline assets consisting of 3.9 million square feet of estimated potential development density at our share.
Excluding the assets recapitalized after the quarter end, we had eight near-term development pipeline assets consisting of 3.5 million square feet of estimated potential development density at our share.

Future Development Pipeline

As of March 31, 2022, we had 20 future development pipeline assets consisting of 10.5 million square feet of estimated potential development density at our share, including the 2.1 million square feet held for sale to Amazon.com, Inc. ("Amazon").
Excluding assets recapitalized after quarter end and Pen Place, which is held for sale to Amazon, we had 16 future development pipeline assets consisting of 6.3 million square feet of estimated potential development density at our share.

Third-Party Asset Management and Real Estate Services Business

For the three months ended March 31, 2022, revenue from third-party real estate services, including reimbursements, was $24.0 million. Excluding reimbursements and service revenue from our interests in consolidated and unconsolidated real estate ventures, revenue from our third-party asset management and real estate services business was $12.3 million, primarily driven by $6.1 million of property and asset management fees, $3.5 million of development fees, $1.8 million of leasing fees and $0.6 million of other service revenue.

Balance Sheet

As of March 31, 2022, our total enterprise value was approximately $6.7 billion, comprising 139.6 million common shares and units valued at $4.1 billion, and debt (net of premium / (discount) and deferred financing costs) at our share of $2.8 billion, less cash and cash equivalents at our share of $207.6 million.
As of March 31, 2022, we had $189.1 million of cash and cash equivalents ($207.6 million of cash and cash equivalents at our share), and $699.5 million of capacity under our credit facility.
Net debt to annualized Adjusted EBITDA at our share for the three months ended March 31, 2022 was 9.6x and our net debt / total enterprise value was 39.1% as of March 31, 2022. Net debt to annualized Adjusted EBITDA for the three months ended March 31, 2022 would have been 7.6x and our net debt / total enterprise value would have been 30.1% as of March 31, 2022, after adjusting for net proceeds from the sales and recapitalizations which closed subsequent to quarter end, and $198.0 million of gross proceeds from the sale of Pen Place that is expected to close in Q2 2022.

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Investing and Financing Activities

In January 2022, one of our unconsolidated real ventures sold various assets for $15.4 million at our share.
In January 2022, we sold investments in equity securities for $17.8 million, resulting in a realized gain of $13.9 million.
As previously announced, effective as of January 14, 2022, the Tranche A-1 Term Loan was amended to extend the maturity date to January 2025 with two one-year extension options, and to amend the leverage-based pricing grid to Secured Overnight Financing Rate plus 1.15%, based upon our current leverage level.
We repurchased and retired 3.3 million common shares for $93.1 million, a weighted average purchase price per share of $27.86.

Subsequent to March 31, 2022:

We repurchased and retired 707,000 common shares for $19.4 million, a weighted average purchase price per share of $27.39.
We repaid $210.0 million on our revolving credit facility.

Dividends

On April 29, 2022, our Board of Trustees declared a quarterly dividend of $0.225 per common share, payable on May 27, 2022 to shareholders of record as of May 13, 2022.

About JBG SMITH

JBG SMITH owns, operates, invests in and develops a dynamic portfolio of mixed-use properties in the high growth and high barrier-to-entry submarkets in and around Washington, DC. Through an intense focus on placemaking, JBG SMITH cultivates vibrant, amenity-rich, walkable neighborhoods throughout the Washington, DC metropolitan area. Over half of JBG SMITH’s holdings are in the National Landing submarket in Northern Virginia, where it serves as the developer for Amazon’s new headquarters, and where Virginia Tech’s $1 billion Innovation Campus is under construction. JBG SMITH's portfolio currently comprises 17.9 million square feet of high-growth office, multifamily and retail assets at share, 99% of which are metro-served. It also maintains a development pipeline encompassing 14.4 million square feet of mixed-use development opportunities. JBG SMITH is committed to the operation and development of green, smart, and healthy buildings and plans to maintain carbon neutral operations annually. For more information on JBG SMITH please visit www.jbgsmith.com.

Forward-Looking Statements

Certain statements contained herein may constitute "forward-looking statements" as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Consequently, the future results, financial condition and business of JBG SMITH Properties ("JBG SMITH", the "Company", "we", "us", "our" or similar terms) may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as "approximate", "hypothetical", "potential", "believes", "expects", "anticipates", "estimates", "intends", "plans", "would", "may" or similar expressions in this earnings

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release. One of the most significant factors that could cause actual outcomes to differ materially from our forward-looking statements is the adverse effect of the current pandemic of the novel coronavirus, or COVID-19, and the ensuing economic turmoil on the Company, our financial condition, results of operations, cash flows, performance, our tenants, the real estate market, and the global economy and financial markets. The extent to which COVID-19 continues to impact us and our tenants depends on future developments, many of which are highly uncertain and cannot be predicted with confidence. These developments include: the continued severity, duration, transmission rate and geographic spread of COVID-19 in the United States, the duration of associated immunity and vaccine efficacy against variants of COVID-19, the extent and effectiveness of other containment measures taken, and the response of the overall economy, the financial markets and the population (including the potential effects of inflation), particularly in areas in which we operate, and whether the residential market in the Washington, DC area and any of our properties will be materially impacted by the various moratoriums on residential evictions, among others. Moreover, investors are cautioned to interpret many of the risks identified under the section titled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic. We also note the following forward-looking statements: the impact of COVID-19 and the ensuing economic turmoil on our Company, NOI, SSNOI, net asset value, share price, occupancy rates, revenue from our multifamily and commercial portfolios, operating costs, deferrals of rent, uncollectible operating lease receivables, parking revenue, and burn-off of rent abatement; the impact of disruptions to the credit and capital markets on our ability to access capital, including refinancing maturing debt; changes to the amount and manner in which tenants use space; whether we incur additional costs or make additional concessions or offer other incentives to existing or prospective tenants to reconfigure space; whether the Washington, DC area will be more resilient than other parts of the country in any recession resulting from COVID-19; whether we will recognize currently estimated unrecognized development fee revenue on the anticipated timing or at all; our annual dividend per share and dividend yield; whether in the case of our under-construction and near-term development pipeline assets, estimated square feet, estimated number of units and in the case of our future development pipeline assets, estimated potential development density are accurate; expected key Amazon transaction terms and timeframes for closing any Amazon transactions not yet closed; planned infrastructure and educational improvements related to Amazon's additional headquarters and the Virginia Tech Innovation Campus; the economic impact, job growth, expansion of public transportation and related demand for multifamily and commercial properties of Amazon's additional headquarters on the DC area and National Landing and the speed with which such impact occurs and Amazon’s plans for accelerated hiring and in-person work requirements; the impact of our role as the developer, property manager and retail leasing agent in connection with Amazon's new headquarters; our development plans related to National Landing; our ability to satisfy environmental, social or governance standards set by various constituencies; whether we can access agency debt secured by our currently unencumbered multifamily assets timely, on reasonable terms or at all; whether our contemplated like-kind exchange of The Batley will occur; whether our sale of Pen Place will generate the amount of proceeds anticipated; and whether the allocation of capital to our share repurchase plan has any impact on our share price.

Many of the factors that will determine the outcome of these and our other forward-looking statements are beyond our ability to control or predict. These factors include, among others: adverse economic conditions in the Washington, DC metropolitan area, including in relation to COVID-19, the timing of and costs associated with development and property improvements, financing commitments, and general competitive factors. For further discussion of factors that could materially affect the outcome of our forward-looking statements and other risks and

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uncertainties, see "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the Cautionary Statement Concerning Forward-Looking Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 and other periodic reports the Company files with the Securities and Exchange Commission. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date hereof.

Pro Rata Information

We present certain financial information and metrics in this release "at JBG SMITH Share," which refers to our ownership percentage of consolidated and unconsolidated assets in real estate ventures (collectively, "real estate ventures") as applied to these financial measures and metrics. Financial information "at JBG SMITH Share" is calculated on an asset-by-asset basis by applying our percentage economic interest to each applicable line item of that asset's financial information. "At JBG SMITH Share" information, which we also refer to as being "at share," "our pro rata share" or "our share," is not, and is not intended to be, a presentation in accordance with GAAP. Given that a substantial portion of our assets are held through real estate ventures, we believe this form of presentation, which presents our economic interests in the partially owned entities, provides investors valuable information regarding a significant component of our portfolio, its composition, performance and capitalization.

We do not control the unconsolidated real estate ventures and do not have a legal claim to our co-venturers' share of assets, liabilities, revenue and expenses. The operating agreements of the unconsolidated real estate ventures generally allow each co-venturer to receive cash distributions to the extent there is available cash from operations. The amount of cash each investor receives is based upon specific provisions of each operating agreement and varies depending on certain factors including the amount of capital contributed by each investor and whether any investors are entitled to preferential distributions.

With respect to any such third-party arrangement, we would not be in a position to exercise sole decision-making authority regarding the property, real estate venture or other entity, and may, under certain circumstances, be exposed to economic risks not present were a third-party not involved. We and our respective co-venturers may each have the right to trigger a buy-sell or forced sale arrangement, which could cause us to sell our interest, or acquire our co-venturers' interests, or to sell the underlying asset, either on unfavorable terms or at a time when we otherwise would not have initiated such a transaction. Our real estate ventures may be subject to debt, and the repayment or refinancing of such debt may require equity capital calls. To the extent our co-venturers do not meet their obligations to us or our real estate ventures or they act inconsistent with the interests of the real estate venture, we may be adversely affected. Because of these limitations, the non-GAAP "at JBG SMITH Share" financial information should not be considered in isolation or as a substitute for our financial statements as reported under GAAP.

Disposition and Recapitalization Activity Subsequent to March 31, 2022 – Adjustment of Calculations

On April 1, 2022, we sold the Universal Buildings, commercial assets located in Washington DC, for $228.0 million.

7


On April 13, 2022, we formed an unconsolidated real estate venture with affiliates of Fortress Investment Group LLC ("Fortress") to recapitalize a 1.6 million square foot office portfolio and land parcels valued at $580.0 million comprising four wholly owned commercial assets (7200 Wisconsin Avenue, 1730 M Street, RTC-West/RTC-West Trophy Office/RTC-West Land and Courthouse Plaza 1 and 2), which were classified as assets held for sale as of March 31, 2022. Fortress contributed $131.0 million for a 66.5% interest in the venture. In connection with the transaction, the real estate venture obtained mortgage loans totaling $458.0 million secured by the properties, of which $402.0 million was drawn at closing. We will provide asset management, property management and leasing services to the venture.
Because our interest in the venture is subordinated to a 15% preferred return to Fortress, we do not anticipate receiving any near-term cash flow distributions from it. Where noted and going forward, these assets will be excluded from the occupancy, non-GAAP financial measures and leverage metrics presented in our investor package.

On April 29, 2022, we sold a 99-year term leasehold interest in a future development asset located in Reston, VA.

Non-GAAP Financial Measures

This release includes non-GAAP financial measures. For these measures, we have provided an explanation of how these non-GAAP measures are calculated and why JBG SMITH's management believes that the presentation of these measures provides useful information to investors regarding JBG SMITH's financial condition and results of operations. Reconciliations of certain non-GAAP measures to the most directly comparable GAAP financial measure are included in this earnings release. Our presentation of non-GAAP financial measures may not be comparable to similar non-GAAP measures used by other companies. In addition to "at share" financial information, the following non-GAAP measures are included in this release:

Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), EBITDA for Real Estate ("EBITDAre") and "Adjusted EBITDA" are non-GAAP financial measures. EBITDA and EBITDAre are used by management as supplemental operating performance measures, which we believe help investors and lenders meaningfully evaluate and compare our operating performance from period-to-period by removing from our operating results the impact of our capital structure (primarily interest charges from our outstanding debt and the impact of our interest rate swaps) and certain non-cash expenses (primarily depreciation and amortization on our assets). EBITDAre is computed in accordance with the definition established by the National Association of Real Estate Investment Trusts ("Nareit"). Nareit defines EBITDAre as GAAP net income (loss) adjusted to exclude interest expense, income taxes, depreciation and amortization expenses, gains and losses on sales of real estate and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, including our share of such adjustments of unconsolidated real estate ventures. These supplemental measures may help investors and lenders understand our ability to incur and service debt and to make capital expenditures. EBITDA and EBITDAre are not substitutes for net income (loss) (computed in accordance with GAAP) and may not be comparable to similarly titled measures used by other companies.

Adjusted EBITDA represents EBITDAre adjusted for items we believe are not representative of ongoing operating results, such as Transaction and Other Costs, impairment write-downs of right-of-use assets associated with leases in which we are a lessee, gain (loss) on the extinguishment of debt, earnings (losses) and distributions in excess of our investment in unconsolidated real estate ventures, lease liability adjustments, income from investments, business interruption insurance proceeds and share-based compensation expense related to the Formation

8


Transaction and special equity awards. We believe that adjusting such items not considered part of our comparable operations, provides a meaningful measure to evaluate and compare our performance from period-to-period.

Because EBITDA, EBITDAre and Adjusted EBITDA have limitations as analytical tools, we use EBITDA, EBITDAre and Adjusted EBITDA to supplement GAAP financial measures. Additionally, we believe that users of these measures should consider EBITDA, EBITDAre and Adjusted EBITDA in conjunction with net income (loss) and other GAAP measures in understanding our operating results.

Funds from Operations ("FFO"), "Core FFO" and Funds Available for Distribution ("FAD") are non-GAAP financial measures. FFO is computed in accordance with the definition established by Nareit in the Nareit FFO White Paper - 2018 Restatement. Nareit defines FFO as net income (loss) (computed in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, including our share of such adjustments for unconsolidated real estate ventures.

Core FFO represents FFO adjusted to exclude items (net of tax) which we believe are not representative of ongoing operating results, such as Transaction and Other Costs, impairment write-downs of right-of-use assets associated with leases in which we are a lessee, gains (or losses) on the extinguishment of debt, earnings (losses) and distributions in excess of our investment in unconsolidated real estate ventures, share-based compensation expense related to the Formation Transaction and special equity awards, lease liability adjustments, income from investments, business interruption insurance proceeds, amortization of the management contracts intangible and the mark-to-market of derivative instruments including our share of such adjustments for unconsolidated real estate ventures.

FAD represents Core FFO less recurring tenant improvements, leasing commissions and other capital expenditures, net deferred rent activity, third-party lease liability assumption payments, recurring share-based compensation expense, accretion of acquired below-market leases, net of amortization of acquired above-market leases, amortization of debt issuance costs and other non-cash income and charges, including our share of such adjustments for unconsolidated real estate ventures. FAD is presented solely as a supplemental disclosure that management believes provides useful information as it relates to our ability to fund dividends.

We believe FFO, Core FFO and FAD are meaningful non-GAAP financial measures useful in comparing our levered operating performance from period-to-period and as compared to similar real estate companies because these non-GAAP measures exclude real estate depreciation and amortization expense and other non-comparable income and expenses, which implicitly assumes that the value of real estate diminishes predictably over time rather than fluctuating based on market conditions. FFO, Core FFO and FAD do not represent cash generated from operating activities and are not necessarily indicative of cash available to fund cash requirements and should not be considered as an alternative to net income (loss) (computed in accordance with GAAP) as a performance measure or cash flow as a liquidity measure. FFO, Core FFO and FAD may not be comparable to similarly titled measures used by other companies.

"Net Debt" is a non-GAAP financial measurement. Net Debt represents our total consolidated and unconsolidated indebtedness less cash and cash equivalents at our share. Net Debt is an important component in the calculations of Net Debt to Annualized Adjusted EBITDA and Net Debt / total enterprise value. We believe that Net Debt is a

9


meaningful non-GAAP financial measure useful to investors because we review Net Debt as part of the management of our overall financial flexibility, capital structure and leverage. We may utilize a considerable portion of our cash and cash equivalents at any given time for purposes other than debt reduction. In addition, cash and cash equivalents at our share may not be solely controlled by us. The deduction of cash and cash equivalents at our share from consolidated and unconsolidated indebtedness in the calculation of Net Debt, therefore, should not be understood to mean that it is available exclusively for debt reduction at any given time.

Net Operating Income ("NOI") and "Annualized NOI" are non-GAAP financial measures management uses to assess a segment's performance. The most directly comparable GAAP measure is net income (loss) attributable to common shareholders. We use NOI internally as a performance measure and believe NOI provides useful information to investors regarding our financial condition and results of operations because it reflects only property related revenue (which includes base rent, tenant reimbursements and other operating revenue, net of Free Rent and payments associated with assumed lease liabilities) less operating expenses and ground rent for operating leases, if applicable. NOI also excludes deferred rent, related party management fees, interest expense, and certain other non-cash adjustments, including the accretion of acquired below-market leases and the amortization of acquired above-market leases and below-market ground lease intangibles. Management uses NOI as a supplemental performance measure of our assets and believes it provides useful information to investors because it reflects only those revenue and expense items that are incurred at the asset level, excluding non-cash items. In addition, NOI is considered by many in the real estate industry to be a useful starting point for determining the value of a real estate asset or group of assets. However, because NOI excludes depreciation and amortization and captures neither the changes in the value of our assets that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of our assets, all of which have real economic effect and could materially impact the financial performance of our assets, the utility of NOI as a measure of the operating performance of our assets is limited. NOI presented by us may not be comparable to NOI reported by other REITs that define these measures differently. We believe to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with net income (loss) attributable to common shareholders as presented in our financial statements. NOI should not be considered as an alternative to net income (loss) attributable to common shareholders as an indication of our performance or to cash flows as a measure of liquidity or our ability to make distributions. Annualized NOI, for all assets except Crystal City Marriott, represents NOI for the three months ended March 31, 2022 multiplied by four. Due to seasonality in the hospitality business, Annualized NOI for Crystal City Marriott represents the trailing 12-month NOI as of March 31, 2022. Management believes Annualized NOI provides useful information in understanding our financial performance over a 12-month period, however, investors and other users are cautioned against attributing undue certainty to our calculation of Annualized NOI. Actual NOI for any 12-month period will depend on a number of factors beyond our ability to control or predict, including general capital markets and economic conditions, any bankruptcy, insolvency, default or other failure to pay rent by one or more of our tenants and the destruction of one or more of our assets due to terrorist attack, natural disaster or other casualty, among others. We do not undertake any obligation to update our calculation to reflect events or circumstances occurring after the date of this earnings release. There can be no assurance that the Annualized NOI shown will reflect our actual results of operations over any 12-month period.

"Non-Same Store" refers to all operating assets excluded from the same store pool.

10


"Same Store" refers to the pool of assets that were in-service for the entirety of both periods being compared, which excludes assets for which significant redevelopment, renovation, or repositioning occurred during either of the periods being compared.

Definitions

"Estimated Potential Development Density" reflects management's estimate of developable gross square feet based on our current business plans with respect to real estate owned or controlled as of March 31, 2022. Our current business plans may contemplate development of less than the maximum potential development density for individual assets. As market conditions change, our business plans, and therefore, the Estimated Potential Development Density, could change accordingly. Given timing, zoning requirements and other factors, we make no assurance that Estimated Potential Development Density amounts will become actual density to the extent we complete development of assets for which we have made such estimates.

"First-generation" is a lease on space that had been vacant for at least nine months or a lease on newly delivered space.

"Formation Transaction" refers collectively to the spin-off on July 17, 2017 of substantially all of the assets and liabilities of Vornado Realty Trust's Washington, DC segment, which operated as Vornado / Charles E. Smith, and the acquisition of the management business and certain assets and liabilities of The JBG Companies.

"Free Rent" means the amount of base rent and tenant reimbursements that are abated according to the applicable lease agreement(s).

"Future Development Pipeline" refers to assets that are development opportunities on which we do not intend to commence construction within the next three years where we (i) own land or control the land through a ground lease or (ii) are under a long-term conditional contract to purchase, or enter into, a leasehold interest with respect to land.

"GAAP" refers to accounting principles generally accepted in the United States of America.

"In-Service" refers to commercial or multifamily assets that are at or above 90% leased or have been operating and collecting rent for more than 12 months as of March 31, 2022.

"Near-Term Development Pipeline" refers to select assets that have the potential to commence construction over the next three years, subject to receipt of full entitlements, completion of design and market conditions.

"Second-generation" is a lease on space that had been vacant for less than nine months.

"Transaction and Other Costs" include demolition costs, integration and severance costs, pursuit costs related to other completed, potential and pursued transactions, as well as other expenses.

"Under-Construction" refers to assets that were under construction during the three months ended March 31, 2022.

11


CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

in thousands

March 31, 2022

December 31, 2021

 

 

 

ASSETS

 

Real estate, at cost:

    

  

    

  

Land and improvements

$

1,212,501

$

1,378,218

Buildings and improvements

 

3,968,601

 

4,513,606

Construction in progress, including land

 

348,523

 

344,652

 

5,529,625

 

6,236,476

Less: accumulated depreciation

 

(1,216,402)

 

(1,368,003)

Real estate, net

 

4,313,223

 

4,868,473

Cash and cash equivalents

 

189,140

 

264,356

Restricted cash

 

30,073

 

37,739

Tenant and other receivables

 

45,702

 

44,496

Deferred rent receivable

 

151,024

 

192,265

Investments in unconsolidated real estate ventures

 

461,444

 

462,885

Intangible assets, net

162,139

201,956

Other assets, net

 

71,385

 

240,160

Assets held for sale

 

891,750

 

73,876

 

TOTAL ASSETS

$

6,315,880

$

6,386,206

 

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

 

  

 

  

Liabilities:

 

  

 

  

Mortgages payable, net

$

1,613,082

$

1,777,699

Revolving credit facility

 

300,000

 

300,000

Unsecured term loans, net

 

398,332

 

398,664

Accounts payable and accrued expenses

 

108,436

 

106,136

Other liabilities, net

 

106,929

 

342,565

Liabilities related to assets held for sale

 

368,006

 

Total liabilities

 

2,894,785

 

2,925,064

Commitments and contingencies

 

  

 

  

Redeemable noncontrolling interests

 

546,049

 

522,725

Total equity

 

2,875,046

 

2,938,417

 

TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

$

6,315,880

$

6,386,206


Note: For complete financial statements, please refer to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.

12


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

in thousands, except per share data

Three Months Ended March 31, 

2022

2021

REVENUE

Property rental

$

131,598

    

$

122,241

Third-party real estate services, including reimbursements

 

23,970

 

38,107

Other revenue

 

6,397

 

4,941

Total revenue

 

161,965

 

165,289

EXPENSES

 

  

 

  

Depreciation and amortization

 

58,062

 

64,726

Property operating

 

40,644

 

34,731

Real estate taxes

 

18,186

 

18,310

General and administrative:

 

 

  

Corporate and other

 

15,815

 

12,475

Third-party real estate services

 

27,049

 

28,936

Share-based compensation related to Formation Transaction and special equity awards

 

2,244

 

4,945

Transaction and other costs

 

899

 

3,690

Total expenses

 

162,899

 

167,813

OTHER INCOME (EXPENSE)

 

  

 

  

Income (loss) from unconsolidated real estate ventures, net

 

3,145

 

(943)

Interest and other income, net

 

14,246

 

9

Interest expense

 

(16,278)

 

(16,296)

Loss on the sale of real estate

 

(136)

 

Loss on the extinguishment of debt

 

(591)

 

Total other income (expense)

 

386

 

(17,230)

LOSS BEFORE INCOME TAX (EXPENSE) BENEFIT

 

(548)

 

(19,754)

Income tax (expense) benefit

 

471

 

(4,315)

NET LOSS

 

(77)

 

(24,069)

Net (income) loss attributable to redeemable noncontrolling interests

 

(10)

 

2,230

Net loss attributable to noncontrolling interests

55

1,108

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS

$

(32)

$

(20,731)

LOSS PER COMMON SHARE - BASIC AND DILUTED

$

$

(0.16)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED

 

126,682

 

131,540


Note: For complete financial statements, please refer to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.

13


EBITDA, EBITDAre AND ADJUSTED EBITDA RECONCILIATIONS (NON-GAAP)

(Unaudited)

 

dollars in thousands

    

Three Months Ended March 31, 

 

2022

2021

 

 

EBITDA, EBITDAre and Adjusted EBITDA

 

  

  

Net loss

$

(77)

$

(24,069)

Depreciation and amortization expense

58,062

64,726

Interest expense

16,278

16,296

Income tax expense (benefit)

(471)

4,315

Unconsolidated real estate ventures allocated share of above adjustments

9,829

10,164

EBITDA attributable to noncontrolling interests

(26)

1,071

EBITDA

$

83,595

$

72,503

Loss on the sale of real estate

136

Gain on the sale of unconsolidated real estate assets

(5,243)

EBITDAre

$

78,488

$

72,503

Transaction and other costs (1)

865

2,582

Income from investments, net

(14,071)

Loss on the extinguishment of debt

591

Share-based compensation related to Formation Transaction and special equity awards

2,244

4,945

Earnings and distributions in excess of our investment in unconsolidated real estate venture

(441)

(330)

Unconsolidated real estate ventures allocated share of above adjustments

204

31

Adjusted EBITDA

$

67,880

$

79,731

Net Debt to Annualized Adjusted EBITDA (2)

9.6

x

6.8

x

March 31, 2022

March 31, 2021

Net Debt (at JBG SMITH Share)

  

  

Consolidated indebtedness (3)

$

2,464,640

$

1,979,208

Unconsolidated indebtedness (3)

362,861

401,389

Total consolidated and unconsolidated indebtedness

2,827,501

2,380,597

Less: cash and cash equivalents

207,568

223,142

Net Debt (at JBG SMITH Share)

$

2,619,933

$

2,157,455


Note: All EBITDA measures as shown above are attributable to common limited partnership units ("OP Units").

(1)Includes demolition costs, integration and severance costs, pursuit costs related to other completed, potential and pursued transactions, as well as other expenses. For the three months ended March 31, 2022 and 2021, excludes $34,000 and $1.1 million of transaction costs attributable to noncontrolling interests.
(2)Calculated using the Net Debt below. Quarterly Adjusted EBITDA is annualized by multiplying by four. Net debt to annualized Adjusted EBITDA for the three months ended March 31, 2022 would have been 7.6x after adjusting for net proceeds from the sales and recapitalizations which closed subsequent to quarter end, and $198.0 million of gross proceeds from the sale of Pen Place that is expected to close in the second quarter of 2022.
(3)Net of premium/discount and deferred financing costs.

14


FFO, CORE FFO AND FAD RECONCILIATIONS (NON-GAAP)

(Unaudited)

 

in thousands, except per share data

Three Months Ended March 31, 

 

    

2022

    

2021

FFO and Core FFO

Net loss attributable to common shareholders

$

(32)

 

$

(20,731)

Net income (loss) attributable to redeemable noncontrolling interests

 

10

 

(2,230)

Net loss attributable to noncontrolling interests

 

(55)

 

(1,108)

Net loss

 

(77)

 

(24,069)

Loss on the sale of real estate

 

136

 

Gain on the sale of unconsolidated real estate assets

 

(5,243)

 

Real estate depreciation and amortization

 

55,517

 

62,500

Pro rata share of real estate depreciation and amortization from unconsolidated real estate ventures

 

6,870

 

7,311

FFO attributable to noncontrolling interests

 

(26)

 

1,071

FFO Attributable to OP Units

$

57,177

 

$

46,813

FFO attributable to redeemable noncontrolling interests

 

(5,877)

 

(4,485)

FFO Attributable to Common Shareholders

$

51,300

 

$

42,328

FFO attributable to OP Units

$

57,177

 

$

46,813

Transaction and other costs, net of tax (1)

 

843

 

2,552

Income from investments, net

(10,538)

Gain from mark-to-market on derivative instruments

 

(3,367)

 

(133)

Loss on the extinguishment of debt

 

591

 

Earnings and distributions in excess of our investment in unconsolidated real estate venture

 

(441)

 

(330)

Share-based compensation related to Formation Transaction and special equity awards

 

2,244

 

4,945

Amortization of management contracts intangible, net of tax

 

1,105

 

1,072

Unconsolidated real estate ventures allocated share of above adjustments

 

(48)

 

(10)

Core FFO Attributable to OP Units

$

47,566

 

$

54,909

Core FFO attributable to redeemable noncontrolling interests

 

(4,889)

 

(5,260)

Core FFO Attributable to Common Shareholders

$

42,677

 

$

49,649

FFO per common share - diluted

$

0.40

 

$

0.32

Core FFO per common share - diluted

$

0.34

 

$

0.38

Weighted average shares - diluted (FFO and Core FFO)

 

126,688

 

131,542

See footnotes on page 16.

15


FFO, CORE FFO AND FAD RECONCILIATIONS (NON-GAAP)

(Unaudited)

 

in thousands, except per share data

Three Months Ended March 31, 

 

    

2022

    

2021

FAD

Core FFO attributable to OP Units

    

$

47,566

    

$

54,909

Recurring capital expenditures and Second-generation tenant improvements and leasing commissions (2)

 

(13,702)

 

(10,431)

Straight-line and other rent adjustments (3)

 

(1,791)

 

(4,765)

Third-party lease liability assumption payments

 

 

(678)

Share-based compensation expense

 

10,493

 

8,070

Amortization of debt issuance costs

 

1,176

 

1,105

Unconsolidated real estate ventures allocated share of above adjustments

 

(648)

 

(1,326)

Non-real estate depreciation and amortization

 

1,068

 

750

FAD available to OP Units (A)

$

44,162

$

47,634

Distributions to common shareholders and unitholders (B)

$

32,603

$

35,435

FAD Payout Ratio (B÷A) (4)

 

73.8

%

 

74.4

%

Capital Expenditures

Maintenance and recurring capital expenditures

$

4,820

$

3,926

Share of maintenance and recurring capital expenditures from unconsolidated real estate ventures

 

82

 

47

Second-generation tenant improvements and leasing commissions

 

8,594

 

6,064

Share of Second-generation tenant improvements and leasing commissions from unconsolidated real estate ventures

 

206

 

394

Recurring capital expenditures and Second-generation tenant improvements and leasing commissions

 

13,702

 

10,431

Non-recurring capital expenditures

 

12,810

 

2,836

Share of non-recurring capital expenditures from unconsolidated real estate ventures

 

12

 

51

First-generation tenant improvements and leasing commissions

 

4,450

 

835

Share of First-generation tenant improvements and leasing commissions from unconsolidated real estate ventures

 

473

 

1,192

Non-recurring capital expenditures

 

17,745

 

4,914

Total JBG SMITH Share of Capital Expenditures

$

31,447

$

15,345


(1)Includes demolition costs, integration and severance costs, pursuit costs related to other completed, potential and pursued transactions, as well as other expenses. For the three months ended March 31, 2022 and 2021, excludes $34,000 and $1.1 million of transaction costs attributable to noncontrolling interests.
(2)Includes amounts, at JBG SMITH Share, related to unconsolidated real estate ventures.
(3)Includes straight-line rent, above/below market lease amortization and lease incentive amortization.
(4)The quarterly FAD payout ratio is not necessarily indicative of an amount for the full year due to fluctuation in the timing of capital expenditures, the commencement of new leases and the seasonality of our operations.

16


NOI RECONCILIATIONS (NON-GAAP)

(Unaudited)

 

dollars in thousands

Three Months Ended March 31, 

 

2022

2021

Net loss attributable to common shareholders

    

$

(32)

    

$

(20,731)

Add:

 

  

 

  

Depreciation and amortization expense

 

58,062

 

64,726

General and administrative expense:

 

  

 

  

Corporate and other

 

15,815

 

12,475

Third-party real estate services

 

27,049

 

28,936

Share-based compensation related to Formation Transaction and special equity awards

 

2,244

 

4,945

Transaction and other costs

 

899

 

3,690

Interest expense

 

16,278

 

16,296

Loss on the extinguishment of debt

 

591

 

Income tax expense (benefit)

 

(471)

 

4,315

Net income (loss) attributable to redeemable noncontrolling interests

 

10

 

(2,230)

Net loss attributable to noncontrolling interests

(55)

(1,108)

Less:

 

  

 

  

Third-party real estate services, including reimbursements revenue

 

23,970

 

38,107

Other revenue

 

2,196

 

2,186

Income (loss) from unconsolidated real estate ventures, net

 

3,145

 

(943)

Interest and other income, net

 

14,246

 

9

Loss on the sale of real estate

 

(136)

 

Consolidated NOI

 

76,969

 

71,955

NOI attributable to unconsolidated real estate ventures at our share

 

6,967

 

7,512

Non-cash rent adjustments (1)

 

(1,791)

 

(4,765)

Other adjustments (2)

 

8,760

 

4,738

Total adjustments

 

13,936

 

7,485

NOI

$

90,905

$

79,440

Less: out-of-service NOI loss (3)

 

(1,448)

 

(1,361)

Operating Portfolio NOI

$

92,353

$

80,801

Non-Same Store NOI (4)

 

3,814

 

1,767

Same Store NOI (5)

$

88,539

$

79,034

Change in Same Store NOI

 

12.0

%

 

Number of properties in Same Store pool

 

59

 

  


(1)Adjustment to exclude straight-line rent, above/below market lease amortization and lease incentive amortization.
(2)Adjustment to include other revenue and payments associated with assumed lease liabilities related to operating properties and to exclude commercial lease termination revenue and allocated corporate general and administrative expenses to operating properties.
(3)Includes the results of our Under-Construction assets, and Near-Term and Future Development Pipelines.
(4)Includes the results of properties that were not In-Service for the entirety of both periods being compared and properties for which significant redevelopment, renovation or repositioning occurred during either of the periods being compared.
(5)Includes the results of the properties that are owned, operated and In-Service for the entirety of both periods being compared.

17


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SEP

TABLE OF CONTENTS

MARCH 31, 2022

Table of Contents

Page

Overview

Disclosures

3-5

Company Profile

6

Financial Highlights

7

Financial Highlights - Trends

8-9

Portfolio Overview

10-11

Financial Information

Condensed Consolidated Balance Sheets

12

Condensed Consolidated Statements of Operations

13

Unconsolidated Real Estate Ventures - Balance Sheet and Operating Information

14

Other Tangible Assets and Liabilities

15

EBITDA, EBITDAre and Adjusted EBITDA Reconciliations (Non-GAAP)

16

FFO, Core FFO and FAD Reconciliations (Non-GAAP)

17-18

Third-Party Asset Management and Real Estate Services Business (Non-GAAP)

19

Pro Rata Adjusted General and Administrative Expenses (Non-GAAP)

20

Operating Assets

21

Summary & Same Store NOI (Non-GAAP)

22

Summary NOI (Non-GAAP)

23

Summary NOI - Commercial (Non-GAAP)

24

Summary NOI - Multifamily (Non-GAAP)

25

NOI Reconciliations (Non-GAAP)

26

Leasing Activity

Leasing Activity - Office

27

Net Effective Rent - Office

28

Lease Expirations

29

Signed But Not Yet Commenced Leases

30

Tenant Concentration

31

Industry Diversity

32

Property Data

Portfolio Summary

33

Property Tables:

Commercial

34-37

Multifamily

38-40

Under-Construction

41

Near-Term Development

42

Future Development

43

Disposition and Recapitalization Activity

44

Debt

Debt Summary

45

Debt by Instrument

46-47

Real Estate Ventures

Consolidated and Unconsolidated Real Estate Ventures

48-49

Definitions

50-54

Appendices – Transaction and Other Costs, and Reconciliations of Non-GAAP Financial Measures

55-59

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Page 2


DISCLOSURES

MARCH 31, 2022

Disclosures

Forward-Looking Statements

Certain statements contained herein may constitute "forward-looking statements" as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Consequently, the future results, financial condition and business of JBG SMITH Properties ("JBG SMITH", the "Company", "we", "us", "our" or similar terms) may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as "approximate", "hypothetical", "potential", "believes", "expects", "anticipates", "estimates", "intends", "plans", "would", "may" or similar expressions in this Investor Package. One of the most significant factors that could cause actual outcomes to differ materially from our forward-looking statements is the adverse effect of the current pandemic of the novel coronavirus, or COVID-19, and the ensuing economic turmoil on the Company, our financial condition, results of operations, cash flows, performance, our tenants, the real estate market, and the global economy and financial markets. The extent to which COVID-19 continues to impact us and our tenants depends on future developments, many of which are highly uncertain and cannot be predicted with confidence. These developments include: the continued severity, duration, transmission rate and geographic spread of COVID-19 in the United States, the duration of associated immunity and vaccine efficacy against variants of COVID-19, the extent and effectiveness of other containment measures taken, and the response of the overall economy, the financial markets and the population (including the potential effects of inflation), particularly in areas in which we operate, and whether the residential market in the Washington, DC area and any of our properties will be materially impacted by the various moratoriums on residential evictions, among others. Moreover, investors are cautioned to interpret many of the risks identified under the section titled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic. We also note the following forward-looking statements: the impact of COVID-19 and the ensuing economic turmoil on our Company, Net Operating Income, Same Store Net Operating Income, net asset value, share price, liquidity, occupancy rates, property rental revenue, operating costs, deferrals of rent, uncollectible operating lease receivables, parking revenue, burn-off of rent abatement, construction costs, the timing of disposition of assets in the JBG Legacy Funds, demand for new office space and potential bias of multifamily leasing to renewals; the impact of disruptions to the credit and capital markets on our ability to access capital, including refinancing maturing debt; potential Net Operating Income growth and the assumptions on which such growth is premised, our estimated future leverage (Net Debt/Annualized Adjusted EBITDA and Net Debt/Total Enterprise Value) profile, the economic impact, job growth, expansion of public transportation and related demand for multifamily and commercial properties of Amazon.com, Inc.’s ("Amazon") additional headquarters on the Washington, DC metropolitan area and National Landing and the speed with which such impact occurs and Amazon’s plans for accelerated hiring and in-person work requirements; changes to the amount and manner in which tenants use space; whether we incur additional costs or make additional concessions or offer other incentives to existing or prospective tenants to reconfigure space; long-term trends in demand for housing (including multifamily) within major urban employment centers; whether the Washington, DC area will be more resilient than other parts of the country in any recession resulting from COVID-19; whether we will recognize currently estimated unrecognized development fee revenue on the anticipated timing or at all; potential countercyclical growth caused by the concentration in the Washington, DC area of Amazon, the federal government, government contractors, and the Virginia Tech Innovation campus; the economic impact of DC's diversification into technology; our anticipated acquisitions and dispositions and the ability to identify associated like-kind exchanges; our annual dividend per share and dividend yield; annualized Net Operating Income; adjusted annualized Net Operating Income; expected key Amazon transaction terms and timeframes for closing any Amazon transactions not yet closed; planned infrastructure and educational improvements related to Amazon's additional headquarters; the impact of our role as the developer, property manager and retail leasing agent in connection with Amazon's new headquarters; our development plans related to National Landing; the impact on our net asset value of the Amazon transactions; in the case of any further Amazon lease transactions and our new development opportunities in National Landing, the total square feet to be leased to Amazon and the expected net effective rent; the impact of increases in government spending on increases in agency and contractor spending locally; whether we can access agency debt secured by our currently unencumbered multifamily assets timely, on reasonable terms or at all; whether our contemplated like-kind exchange of The Batley will occur; whether our sale of Pen Place will generate the amount of proceeds anticipated; whether The Batley will generate the annualized NOI anticipated; whether we will succeed in our contemplated recycling of disposition proceeds into acquisitions yielding the anticipated stabilized capitalization rates; whether we are able to renew at or above our historical retention rates on rolling leases; whether the allocation of capital to our share repurchase plan has any impact on our share price; whether our rent estimates are accurate; whether in the case of our Under-Construction and Near-Term Development Pipeline assets, estimated square feet, estimated number of units, estimated construction start, occupancy stabilization dates, the estimated completion date, estimated stabilization date, Estimated Incremental Investment, Estimated Total Investment, Projected NOI Yield, weighted average Projected NOI Yield, NOI yield or Estimated Total Project Cost, estimated total NOI weighted average completion date, weighted average stabilization date, intended type of asset use and potential tenants, Estimated Potential Development Density, and Estimated Stabilized NOI are accurate; whether our Under-Construction assets will deliver the Annualized NOI that we anticipate; our ability to satisfy environmental, social or governance standards set by various constituencies; whether our plans related to our investment in 5G wireless spectrum across National Landing will be a significant demand catalyst; whether the anticipated placemaking in National Landing will be realized; whether Amazon will have a similar growth impact on National Landing as in Seattle; whether Seattle’s South Lake Union region pre-pandemic will prove to be an appropriate comparison to National Landing post-pandemic including respective resident preferences regarding housing, office location and commuting; whether we will be able to successfully shift the majority of our portfolio to multifamily and concentrate our office portfolio in National Landing, and in the case of our Future Development Pipeline opportunities, estimated commercial SF/multifamily

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Page 3


DISCLOSURES

MARCH 31, 2022

units to be replaced, estimated remaining acquisition cost, estimated capitalized cost, Estimated Total Investment, Estimated Potential Development Density and the potential for delays in the entitlement process.

Many of the factors that will determine the outcome of these and our other forward-looking statements are beyond our ability to control or predict. These factors include, among others: adverse economic conditions in the Washington, DC metropolitan area, including in relation to COVID-19, the timing of and costs associated with development and property improvements, financing commitments, and general competitive factors. For further discussion of factors that could materially affect the outcome of our forward-looking statements and other risks and uncertainties, see "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the Cautionary Statement Concerning Forward-Looking Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 and other periodic reports the Company files with the Securities and Exchange Commission. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date hereof.

Organization and Basis of Presentation

JBG SMITH Properties ("JBG SMITH") was organized as a Maryland real estate investment trust ("REIT") for the purpose of receiving, via the spin-off on July 17, 2017 (the "Separation"), substantially all of the assets and liabilities of Vornado Realty Trust's Washington, DC segment. On July 18, 2017, JBG SMITH acquired the management business and certain assets and liabilities of The JBG Companies ("JBG") (the "Combination"). The Separation and the Combination are collectively referred to as the "Formation Transaction."

The information contained in this Investor Package does not purport to disclose all items required by the accounting principles generally accepted in the United States of America ("GAAP") and is unaudited information, unless otherwise indicated.

Pro Rata Information

We present certain financial information and metrics in this Investor Package "at JBG SMITH Share," which refers to our ownership percentage of consolidated and unconsolidated assets in real estate ventures (collectively, "real estate ventures") as applied to these financial measures and metrics. Financial information "at JBG SMITH Share" is calculated on an asset-by-asset basis by applying our percentage economic interest to each applicable line item of that asset's financial information. "At JBG SMITH Share" information, which we also refer to as being "at share," "our pro rata share" or "our share," is not, and is not intended to be, a presentation in accordance with GAAP. Given that a substantial portion of our assets are held through real estate ventures, we believe this form of presentation, which presents our economic interests in the partially owned entities, provides investors valuable information regarding a significant component of our portfolio, its composition, performance and capitalization.

We do not control the unconsolidated real estate ventures and do not have a legal claim to our co-venturers' share of assets, liabilities, revenue and expenses. The operating agreements of the unconsolidated real estate ventures generally allow each co-venturer to receive cash distributions to the extent there is available cash from operations. The amount of cash each investor receives is based upon specific provisions of each operating agreement and varies depending on certain factors including the amount of capital contributed by each investor and whether any investors are entitled to preferential distributions.

With respect to any such third-party arrangement, we would not be in a position to exercise sole decision-making authority regarding the property, real estate venture or other entity, and may, under certain circumstances, be exposed to economic risks not present were a third-party not involved. We and our respective co-venturers may each have the right to trigger a buy-sell or forced sale arrangement, which could cause us to sell our interest, or acquire our co-venturers' interests, or to sell the underlying asset, either on unfavorable terms or at a time when we otherwise would not have initiated such a transaction. Our real estate ventures may be subject to debt, and the repayment or refinancing of such debt may require equity capital calls. To the extent our co-venturers do not meet their obligations to us or our real estate ventures or they act inconsistent with the interests of the real estate venture, we may be adversely affected. Because of these limitations, the non-GAAP "at JBG SMITH Share" financial information should not be considered in isolation or as a substitute for our financial statements as reported under GAAP.

Disposition and Recapitalization Activity Subsequent to March 31, 2022 – Adjustment of Calculations

On April 1, 2022, we sold the Universal Buildings, commercial assets located in Washington DC, for $228.0 million.

On April 13, 2022, we formed an unconsolidated real estate venture with affiliates of Fortress Investment Group LLC ("Fortress") to recapitalize a 1.6 million square foot office portfolio and land parcels valued at $580.0 million comprising four wholly owned commercial assets (7200 Wisconsin Avenue, 1730 M Street, RTC-West/RTC-West Trophy Office/RTC-West Land and Courthouse Plaza 1 and 2), which were classified as assets held for sale as of March 31, 2022. Fortress contributed $131.0 million for a 66.5% interest in the venture. In connection

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Page 4


DISCLOSURES

MARCH 31, 2022

with the transaction, the real estate venture obtained mortgage loans totaling $458.0 million secured by the properties, of which $402.0 million was drawn at closing. We will provide asset management, property management and leasing services to the venture. Because our interest in the venture is subordinated to a 15% preferred return to Fortress, we do not anticipate receiving any near-term cash flow distributions from it. Where noted and going forward, these assets will be excluded from the occupancy, non-GAAP financial measures and leverage metrics presented in our investor package.

On April 29, 2022, we sold a 99-year term leasehold interest in a future development asset located in Reston, VA.

Definitions

See pages 50-54 for definitions of terms used in this Investor Package.

Information herein with respect to the proposed transactions with Amazon is based on executed leases and a purchase and sale agreement between us and Amazon. Closing under this agreement is subject to customary closing conditions.

Non-GAAP Measures

This Investor Package includes non-GAAP measures. For these measures, we have provided an explanation of how these non-GAAP measures are calculated and why our management believes that the presentation of these measures provides useful information to investors regarding our financial condition and results of operations. Reconciliations of certain non-GAAP measures to the most directly comparable GAAP financial measure are included in this Investor Package. Our presentation of non-GAAP financial measures may not be comparable to similar non-GAAP measures used by other companies.

In addition to "at share" financial information, the following non-GAAP measures are included in this Investor Package:

Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA")
EBITDA for Real Estate ("EBITDAre")
Adjusted EBITDA
Funds from Operations ("FFO")
Core FFO
Funds Available for Distribution ("FAD")
Third-Party Asset Management and Real Estate Services Business
Net Operating Income ("NOI")
Annualized NOI
Estimated Stabilized NOI
Projected NOI Yield
Same Store NOI
Consolidated and Unconsolidated Indebtedness
Net Debt
Pro Rata Adjusted General and Administrative Expenses

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Page 5


COMPANY PROFILE

MARCH 31, 2022
(Unaudited)

Company Profile

Executive Officers

Company Snapshot as of March 31, 2022

W. Matthew Kelly

   

Chief Executive Officer and Trustee

    

Exchange/ticker

    

NYSE: JBGS

David P. Paul

 

President and Chief Operating Officer

 

Indicated annual dividend per share

$

0.90

M. Moina Banerjee

 

Chief Financial Officer

 

Dividend yield

 

3.1

% 

Kevin P. Reynolds

 

Chief Development Officer

 

  

 

  

George L. Xanders

Chief Investment Officer

 

Total Enterprise Value (dollars in billions, except share price)

 

  

Steven A. Museles

 

Chief Legal Officer

 

Common share price

$

29.22

 

Common shares and common limited partnership units ("OP Units")
outstanding (in millions) (1)

 

139.59

 

Total market capitalization

$

4.08

 

Total consolidated and unconsolidated indebtedness at JBG SMITH Share

 

2.83

 

Less: cash and cash equivalents at JBG SMITH Share

 

(0.21)

 

Net Debt

$

2.62

 

Total Enterprise Value

$

6.70

 

  

 

Net Debt / Total Enterprise Value

 

39.1

% 


(1)Includes certain fully-vested incentive equity awards that are convertible into OP Units.

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Page 6


FINANCIAL HIGHLIGHTS

MARCH 31, 2022
(Unaudited)

Financial Highlights

 

dollars in thousands, except per share data

Three Months Ended

March 31, 2022

 

Summary Financial Results

Total revenue

$

161,965

Net income attributable to common shareholders

$

(32)

Per diluted common share

$

-

Operating portfolio NOI

$

92,353

FFO (1)

$

57,177

Per OP Unit

$

0.40

Core FFO (1)

$

47,566

Per OP Unit

$

0.34

FAD (1)

$

44,162

FAD payout ratio

 

73.8

%

EBITDA (1)

$

83,595

EBITDAre (1)

$

78,488

Adjusted EBITDA (1)

$

67,880

Net Debt / total enterprise value

 

39.1

% 

Net Debt / total enterprise value, adjusted (2)

30.1

%

Net Debt to annualized Adjusted EBITDA

 

9.6

x

Net Debt to annualized Adjusted EBITDA, adjusted (2)

7.6

x

March 31, 2022

Debt Summary and Key Ratios (at JBG SMITH Share)

 

  

Total consolidated indebtedness (3)

$

2,464,640

Total consolidated and unconsolidated indebtedness (3)

$

2,827,501

Weighted average interest rates:

 

  

Variable rate debt (4)

 

2.28

Fixed rate debt

 

3.83

Total debt

 

3.05

Cash and cash equivalents

$

207,568


(1)Attributable to OP Units, which include units owned by JBG SMITH.
(2)Net Debt to total enterprise value would have been 30.1% as of March 31, 2022, and Net Debt to annualized Adjusted EBITDA would have been 7.6x for the three months ended March 31, 2022, after adjusting for net proceeds from the sales and recapitalizations which closed subsequent to quarter end, and $198.0 million of gross proceeds from the sale of Pen Place that is expected close in Q2 2022.
(3)Net of premium/discount and deferred financing costs.
(4)For floating rate loans with interest rate caps, the weighted average cap strike is 2.51% for consolidated debt, and 2.70% for all debt. The interest rate cap strike is exclusive of the credit spreads associated with the loans.

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Page 7


FINANCIAL HIGHLIGHTS – TRENDS

MARCH 31, 2022
(Unaudited)

Financial Highlights - Trends

Three Months Ended

 

 

dollars in thousands, except per share data, at JBG SMITH Share

    

Q1 2022

    

Q4 2021

    

Q3 2021

    

Q2 2021

    

Q1 2021

Commercial NOI (1)

$

64,919

$

62,300

$

61,889

$

63,849

$

62,537

Multifamily NOI

 

26,887

 

24,061

 

19,107

 

18,644

 

17,775

Other NOI (1)

547

475

496

485

489

Operating portfolio NOI

$

92,353

$

86,836

$

81,492

$

82,978

$

80,801

Total Annualized NOI

$

370,691

$

345,763

$

324,001

$

330,682

$

322,241

Net income (loss) attributable to common shareholders

$

(32)

$

(56,446)

$

893

$

(2,973)

$

(20,731)

Per diluted common share

$

$

(0.45)

$

$

(0.03)

$

(0.16)

FFO (2)

$

57,177

$

47,924

$

40,734

$

41,914

$

46,813

Per OP Unit

$

0.40

$

0.33

$

0.27

$

0.29

$

0.32

Core FFO (2)

$

47,566

$

44,943

$

48,083

$

49,629

$

54,909

Per OP Unit

$

0.34

$

0.31

$

0.32

$

0.34

$

0.38

FAD (2)

$

44,162

$

30,453

$

39,992

$

42,147

$

47,634

FAD payout ratio

 

73.8

%

 

108.8

%

 

84.2

%

 

79.5

%

 

74.4

% 

EBITDA (2)

$

83,595

$

21,744

$

85,275

$

80,668

$

72,503

EBITDAre (2)

$

78,488

$

70,771

$

63,518

$

64,189

$

72,503

Adjusted EBITDA (2)

$

67,880

$

66,169

$

69,799

$

70,817

$

79,731

Net Debt / total enterprise value (3)

 

39.1

%  

 

38.5

%  

 

34.3

%  

 

32.1

%  

 

31.9

% 

Net Debt to annualized Adjusted EBITDA (3)

 

9.6

x

 

9.6

x

 

7.9

x

 

7.6

x

 

6.8

x

Q1 2022

Q4 2021

Q3 2021

Q2 2021

Q1 2021

Number of Operating Assets

 

  

 

  

 

  

 

  

 

  

Commercial (1)

 

41

 

41

 

41

 

42

 

41

Multifamily

 

20

 

22

 

21

 

21

 

21

Other (1)

1

1

1

1

1

Total

 

62

 

64

 

63

 

64

 

63

Operating Portfolio % Leased

 

  

 

  

 

  

 

  

 

  

Commercial (4)

 

85.2

%  

 

84.9

%  

 

84.9

%  

 

85.9

%  

 

87.3

% 

Multifamily (5)

 

94.1

%  

 

93.6

%  

 

94.0

%  

 

92.8

%  

 

91.5

% 

Weighted Average

 

88.1

%  

 

87.7

%  

 

87.7

%  

 

88.0

%  

 

88.6

% 

Operating Portfolio % Occupied (5)

 

  

 

  

 

  

 

  

 

  

Commercial (4)

 

83.3

%  

 

82.9

%  

 

82.6

%  

 

84.4

%  

 

86.9

% 

Multifamily (5)

 

91.6

%  

 

91.8

%  

 

92.4

%  

 

88.7

%  

 

86.6

% 

Weighted Average

 

86.0

%  

 

85.8

%  

 

85.7

%  

 

85.7

%  

 

86.8

% 

See footnotes on page 9.

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Page 8


FINANCIAL HIGHLIGHTS – TRENDS

MARCH 31, 2022
(Unaudited)

Footnotes

Note: See appendices for reconciliations of non-GAAP financial measures to their respective comparable GAAP financial measures.

(1)1700 M Street was reclassified from the operating commercial portfolio to the operating other portfolio during Q1 2022. See footnote (7) on page 23 for more information.
(2)Attributable to OP Units, which include units owned by JBG SMITH.
(3)Net Debt to total enterprise value would have been 30.1% as of March 31, 2022, and Net Debt to Annualized Adjusted EBITDA would have been 7.6x in Q1 2022, after adjusting for net proceeds from the sales and recapitalizations which closed subsequent to quarter end, and $198.0 million of gross proceeds from the sale of Pen Place that is expected to close in Q2 2022.
(4)Crystal City Marriott is excluded from the Percent Leased and the Percent Occupied metrics.
(5)Includes Recently Delivered assets. In-Service assets were 95.5% leased and 92.9% occupied as of Q1 2022, 95.4% leased and 93.4% occupied as of Q4 2021, 96.3% leased and 94.5% occupied as of Q3 2021, 96.4% leased and 92.7% occupied as of Q2 2021, and 92.9% leased and 89.2% occupied as of Q1 2021. 2221 S. Clark Street - Residential and 900 W Street are excluded from the Percent Leased and the Percent Occupied metrics as they are operated as short-term rental properties.
(6)Percent Occupied excludes occupied retail SF.

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Page 9


PORTFOLIO OVERVIEW

MARCH 31, 2022
(Unaudited)

Portfolio Overview

100% Share

At JBG SMITH Share

 

Annualized Rent

Annualized

per Square Foot/

 

Number of

Square Feet/

Square Feet/

% 

Rent

Monthly Rent

Annualized NOI

 

Assets

Units

Units

Leased

% Occupied (1)

(in thousands)

Per Unit (2)

(in thousands)

 

Operating

Commercial (3)

National Landing

23

7,338,357

7,062,478

87.1%

86.5%

$

255,552

$

44.36

$

171,003

Other VA

6

2,159,986

1,501,819

87.8%

86.5%

58,281

46.47

38,276

DC

9

2,760,491

1,924,674

75.7%

69.4%

78,847

57.92

33,176

MD

3

784,247

784,247

86.2%

81.8%

33,463

49.86

18,500

Commercial - total / weighted average

    

41

    

13,043,081

    

11,273,218

    

85.2%

83.3%

$

426,143

    

$

46.99

    

$

260,955

Multifamily (4)

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

National Landing

4

2,856

2,856

96.5%

94.3%

$

62,722

$

2,043

$

42,260

DC

12

3,743

3,041

94.1%

90.9%

86,290

2,337

59,600

MD

3

794

444

99.3%

98.2%

8,288

1,571

5,800

In-Service

 

19

 

7,393

6,341

 

95.5%

92.9%

157,300

2,146

107,660

Recently Delivered

 

1

 

322

 

161

 

56.0%

41.0%

 

2,701

 

2,766

 

(112)

Multifamily – total / weighted average

 

20

 

7,715

 

6,502

 

94.1%

91.6%

$

160,001

$

2,154

$

107,548

Other (5)

1

2,188

 

Operating - Total / Weighted Average

 

62

 

13,043,081 SF/ 7,715 Units

 

11,273,218 SF/ 6,502 Units

 

88.1%

86.0%

$

586,144

$46.99 per SF/
$2,154 per unit

$

370,691

Development (6)

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Under-Construction

 

2

 

1,583 Units

 

1,583 Units

 

  

 

 

 

  

Near-Term Development

 

9

 

4,138,300

 

3,928,700

 

  

 

  

 

  

 

 

  

Future Development

 

20

 

13,022,400

 

10,496,300

 

  

 

  

 

  

 

 

  


(1)Percent Occupied excludes retail SF.
(2)For commercial assets, represents annualized office rent divided by occupied office SF; annualized retail rent and retail SF are excluded from this metric. For multifamily assets, represents monthly multifamily rent divided by occupied units; retail rent is excluded from this metric. Annualized Rent and Annualized Rent per Square Foot exclude percentage rent and the square footage of office tenants that only pay percentage rent. Occupied square footage may differ from leased square footage because leased square footage includes space for leases that have been signed but the tenant has not yet taken occupancy (not yet included in Percent Occupied metrics).
(3)Crystal City Marriott is excluded from Percent Leased, Percent Occupied, Annualized Rent and Annualized Rent per Square Foot metrics.
(4)2221 S. Clark Street - Residential and 900 W Street are excluded from Percent Leased, Percent Occupied, Annualized Rent and Monthly Rent Per Unit metrics.
(5)1700 M Street (for which we are the ground lessor) is excluded from Percent Leased, Percent Occupied, Annualized Rent and Annualized Rent per Square Foot metrics. See footnote (7) on page 23 for more information.
(6)Refer to pages 41- 43 for detail on Under-Construction assets, and Near-Term and Future Development Pipelines.

Graphic

Page 10


PORTFOLIO OVERVIEW, ADJUSTED

MARCH 31, 2022
(Unaudited)

100% Share

At JBG SMITH Share

Annualized Rent

Annualized

per Square Foot/

Number of

Square Feet/

Square Feet/

Rent

Monthly Rent

Annualized NOI

 

Assets

Units

Units

Leased

% Occupied (1)

(in thousands)

Per Unit (2)

(in thousands)

Operating

Commercial (3)

National Landing

23

7,338,357

7,062,478

87.1%

86.5%

$

255,552

$

44.36

$

171,003

Other VA

4

1,057,085

398,918

95.0%

95.3%

18,809

53.10

12,248

DC

7

1,896,192

1,060,375

80.6%

72.2%

46,373

61.45

16,896

MD

2

513,430

513,430

93.4%

92.2%

26,344

53.48

14,072

Commercial - total / weighted average

    

36

    

10,805,064

    

9,035,201

    

87.0%

85.5%

$

347,078

    

$

47.07

    

$

214,219

Multifamily (4)

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

National Landing

4

2,856

2,856

96.5%

94.3%

$

62,722

$

2,043

$

42,260

DC

12

3,743

3,041

94.1%

90.9%

86,290

2,337

59,600

MD

3

794

444

99.3%

98.2%

8,288

1,571

5,656

In-Service

 

19

 

7,393

6,341

 

95.5%

92.9%

157,300

2,146

107,516

Recently Delivered

 

1

 

322

 

161

 

56.0%

41.0%

 

2,701

 

2,766

 

(112)

Multifamily – total / weighted average

 

20

 

7,715

 

6,502

 

94.1%

91.6%

$

160,001

$

2,154

$

107,404

Other (5)

1

2,188

 

Operating - Total / Weighted Average

 

57

 

10,805,064 SF/ 7,715 Units

 

9,035,201 SF/ 6,502 Units

 

89.7%

87.8%

$

507,079

$47.07 per SF/
$2,154 per unit

$

323,811

Development (6)

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Under-Construction

 

2

 

1,583 Units

 

1,583 Units

 

  

 

 

 

  

Near-Term Development

 

8

 

3,532,700

 

3,532,700

 

  

 

  

 

  

 

 

  

Future Development

 

16

 

8,799,800

 

6,273,700

 

  

 

  

 

  

 

 

  

Note: Adjusted to exclude assets sold and recapitalized subsequent to quarter end, and Pen Place, which is held for sale to Amazon.

See footnotes on page 10.

Graphic

Page 11


CONDENSED CONSOLIDATED BALANCE SHEETS

MARCH 31, 2022
(Unaudited)

Condensed Consolidated Balance Sheets

 

in thousands

March 31, 2022

December 31, 2021

 

 

  

ASSETS

Real estate, at cost:

    

  

    

  

Land and improvements

$

1,212,501

$

1,378,218

Buildings and improvements

 

3,968,601

 

4,513,606

Construction in progress, including land

 

348,523

 

344,652

 

5,529,625

 

6,236,476

Less: accumulated depreciation

 

(1,216,402)

 

(1,368,003)

Real estate, net

 

4,313,223

 

4,868,473

Cash and cash equivalents

 

189,140

 

264,356

Restricted cash

 

30,073

 

37,739

Tenant and other receivables

 

45,702

 

44,496

Deferred rent receivable

 

151,024

 

192,265

Investments in unconsolidated real estate ventures

 

461,444

 

462,885

Intangible assets, net

162,139

201,956

Other assets, net

 

71,385

 

240,160

Assets held for sale

 

891,750

 

73,876

TOTAL ASSETS

$

6,315,880

$

6,386,206

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

 

  

 

  

Liabilities:

 

  

 

  

Mortgages payable, net

$

1,613,082

$

1,777,699

Revolving credit facility

 

300,000

 

300,000

Unsecured term loans, net

 

398,332

 

398,664

Accounts payable and accrued expenses

 

108,436

 

106,136

Other liabilities, net

 

106,929

 

342,565

Liabilities related to assets held for sale

 

368,006

 

Total liabilities

 

2,894,785

 

2,925,064

Commitments and contingencies

 

  

 

  

Redeemable noncontrolling interests

 

546,049

 

522,725

Total equity

 

2,875,046

 

2,938,417

TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

$

6,315,880

$

6,386,206


Note: For complete financial statements, please refer to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.

Graphic

Page 12


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

MARCH 31, 2022
(Unaudited)

Condensed Consolidated Statements of Operations

in thousands, except per share data

Three Months Ended March 31, 

 

2022

2021

 

REVENUE

Property rental

$

131,598

    

$

122,241

Third-party real estate services, including reimbursements

 

23,970

 

38,107

Other revenue

 

6,397

 

4,941

Total revenue

 

161,965

 

165,289

EXPENSES

 

  

 

  

Depreciation and amortization

 

58,062

 

64,726

Property operating

 

40,644

 

34,731

Real estate taxes

 

18,186

 

18,310

General and administrative:

 

 

Corporate and other

 

15,815

 

12,475

Third-party real estate services

 

27,049

 

28,936

Share-based compensation related to Formation Transaction and special equity awards

 

2,244

 

4,945

Transaction and Other Costs

 

899

 

3,690

Total expenses

 

162,899

 

167,813

OTHER INCOME (EXPENSE)

 

  

 

  

Income (loss) from unconsolidated real estate ventures, net

 

3,145

 

(943)

Interest and other income, net

 

14,246

 

9

Interest expense

 

(16,278)

 

(16,296)

Loss on the sale of real estate

 

(136)

 

Loss on the extinguishment of debt

 

(591)

 

Total other income (expense)

 

386

 

(17,230)

LOSS BEFORE INCOME TAX (EXPENSE) BENEFIT

 

(548)

 

(19,754)

Income tax (expense) benefit

 

471

 

(4,315)

NET LOSS

 

(77)

 

(24,069)

Net (income) loss attributable to redeemable noncontrolling interests

 

(10)

 

2,230

Net loss attributable to noncontrolling interests

55

 

1,108

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS

$

(32)

$

(20,731)

LOSS PER COMMON SHARE - BASIC AND DILUTED

$

$

(0.16)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED

 

126,682

 

131,540


Note: For complete financial statements, please refer to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.

Graphic

Page 13


UNCONSOLIDATED REAL ESTATE VENTURES

MARCH 31, 2022
(Unaudited)

nconsolidated Real Estate Ventures

 

in thousands, at JBG SMITH Share

    

 

BALANCE SHEET INFORMATION

March 31, 2022

 

Total real estate, at cost

$

802,109

Less: accumulated depreciation

 

(55,242)

Real estate, net

 

746,867

Cash and cash equivalents

 

18,490

Other assets, net

 

83,586

Total assets

$

848,943

Borrowings, net

$

362,861

Other liabilities, net

 

42,261

Total liabilities

$

405,122

Three Months Ended

 

 

OPERATING INFORMATION

March 31, 2022

 

Total revenue

$

15,166

Expenses:

 

  

Depreciation and amortization

 

6,734

Property operating

 

5,426

Real estate taxes

 

2,504

Total expenses

 

14,664

Other income (expense):

 

  

Interest expense

 

(2,959)

Gain on the sale of real estate

 

5,243

Loss on the extinguishment of debt

(130)

Interest and other income, net

 

2

Net income

$

2,658

Earnings and distributions in excess of our investment in unconsolidated real estate venture

 

441

Other

 

46

Income from unconsolidated real estate ventures, net

$

3,145

Graphic

Page 14


OTHER TANGIBLE ASSETS AND LIABILITIES

MARCH 31, 2022
(Unaudited)

Other Tangible Assets and Liabilities

 

in thousands, at JBG SMITH Share

    

March 31, 2022

 

Other Tangible Assets, Net (1) (2)

Restricted cash

$

39,019

Tenant and other receivables, net

 

47,674

Other assets, net

 

81,392

Total Other Tangible Assets, Net

$

168,085

Other Tangible Liabilities, Net (2) (3)

 

  

Accounts payable and accrued liabilities

$

122,417

Other liabilities, net

 

114,587

Total Other Tangible Liabilities, Net

$

237,004


(1)Excludes cash and cash equivalents.
(2)Excludes assets held for sale.
(3)Excludes liabilities related to assets held for sale and debt.

Graphic

Page 15


EBITDA, EBITDAre AND ADJUSTED EBITDA RECONCILIATIONS (NON-GAAP)

MARCH 31, 2022
(Unaudited)

EBITDA, EBITDAre and Adjusted EBITDA

dollars in thousands

Three Months Ended March 31, 

 

2022

2021

 

 

EBITDA, EBITDAre and Adjusted EBITDA

  

  

Net loss

$

(77)

$

(24,069)

Depreciation and amortization expense

58,062

64,726

Interest expense

16,278

16,296

Income tax expense (benefit)

(471)

4,315

Unconsolidated real estate ventures allocated share of above adjustments

9,829

10,164

EBITDA attributable to noncontrolling interests

(26)

1,071

EBITDA

$

83,595

$

72,503

Loss on the sale of real estate

136

Gain on the sale of unconsolidated real estate assets

(5,243)

EBITDAre

$

78,488

$

72,503

Transaction and Other Costs (1)

865

2,582

Income from investments, net

(14,071)

Loss on the extinguishment of debt

591

Share-based compensation related to Formation Transaction and special equity awards

2,244

4,945

Earnings and distributions in excess of our investment in unconsolidated real estate venture

(441)

(330)

Unconsolidated real estate ventures allocated share of above adjustments

204

31

Adjusted EBITDA

$

67,880

$

79,731

Net Debt to Annualized Adjusted EBITDA (2)

9.6

x

6.8

x

Net Debt (at JBG SMITH Share)

March 31, 2022

March 31, 2021

Consolidated indebtedness (3)

$

2,464,640

$

1,979,208

Unconsolidated indebtedness (3)

362,861

401,389

Total consolidated and unconsolidated indebtedness

2,827,501

2,380,597

Less: cash and cash equivalents

207,568

223,142

Net Debt (at JBG SMITH Share)

$

2,619,933

$

2,157,455


Note: All EBITDA measures as shown above are attributable to OP Units.

(1)See page 55 for the components of Transaction and Other Costs. For the three months ended March 31, 2022 and 2021 excludes $34,000 and $1.1 million of transaction costs attributable to noncontrolling interests.
(2)Calculated using the Net Debt below. Quarterly Adjusted EBITDA is annualized by multiplying by four. Net debt to annualized Adjusted EBITDA for the three months ended March 31, 2022 would have been 7.6x after adjusting for net proceeds from the sales and recapitalizations which closed subsequent to quarter end, and $198.0 million of gross proceeds from the sale of Pen Place that is expected to close in the second quarter of 2022.
(3)Net of premium/discount and deferred financing costs.

Graphic

Page 16


FFO, CORE FFO AND FAD RECONCILIATIONS (NON-GAAP)

MARCH 31, 2022
(Unaudited)

FFO, Core FFO and FAD

in thousands, except per share data

Three Months Ended March 31, 

2022

    

2021

 

 

FFO and Core FFO

Net loss attributable to common shareholders

$

(32)

 

$

(20,731)

Net income (loss) attributable to redeemable noncontrolling interests

 

10

 

(2,230)

Net loss attributable to noncontrolling interests

 

(55)

 

(1,108)

Net loss

 

(77)

 

(24,069)

Loss on the sale of real estate

 

136

 

Gain on the sale of unconsolidated real estate assets

 

(5,243)

 

Real estate depreciation and amortization

 

55,517

 

62,500

Pro rata share of real estate depreciation and amortization from unconsolidated real estate ventures

 

6,870

 

7,311

FFO attributable to noncontrolling interests

 

(26)

 

1,071

FFO Attributable to OP Units

$

57,177

 

$

46,813

FFO attributable to redeemable noncontrolling interests

 

(5,877)

 

(4,485)

FFO Attributable to Common Shareholders

$

51,300

 

$

42,328

FFO attributable to OP Units

$

57,177

 

$

46,813

Transaction and Other Costs, net of tax (1)

 

843

 

2,552

Income from investments, net

 

(10,538)

 

Gain from mark-to-market on derivative instruments

 

(3,367)

 

(133)

Loss on the extinguishment of debt

 

591

 

Earnings and distributions in excess of our investment in unconsolidated real estate venture

 

(441)

 

(330)

Share-based compensation related to Formation Transaction and special equity awards

 

2,244

 

4,945

Amortization of management contracts intangible, net of tax

 

1,105

 

1,072

Unconsolidated real estate ventures allocated share of above adjustments

 

(48)

 

(10)

Core FFO Attributable to OP Units

$

47,566

 

$

54,909

Core FFO attributable to redeemable noncontrolling interests

 

(4,889)

 

(5,260)

Core FFO Attributable to Common Shareholders

$

42,677

 

$

49,649

FFO per common share - diluted

$

0.40

 

0.32

Core FFO per common share - diluted

$

0.34

 

0.38

Weighted average shares - diluted (FFO and Core FFO)

 

126,688

 

131,542

See footnotes on page 18.

Graphic

Page 17


FFO, CORE FFO AND FAD RECONCILIATIONS (NON-GAAP)

MARCH 31, 2022
(Unaudited)

 

in thousands, except per share data

Three Months Ended March 31, 

 

2022

2021

FAD

Core FFO attributable to OP Units

$

47,566

    

$

54,909

Recurring capital expenditures and Second-generation tenant improvements and leasing commissions (2)

 

(13,702)

 

(10,431)

Straight-line and other rent adjustments (3)

 

(1,791)

 

(4,765)

Third-party lease liability assumption payments

 

 

(678)

Share-based compensation expense

 

10,493

 

8,070

Amortization of debt issuance costs

 

1,176

 

1,105

Unconsolidated real estate ventures allocated share of above adjustments

 

(648)

 

(1,326)

Non-real estate depreciation and amortization

 

1,068

 

750

FAD available to OP Units (A)

$

44,162

$

47,634

Distributions to common shareholders and unitholders (B)

$

32,603

$

35,435

FAD Payout Ratio (B÷A) (4)

 

73.8

%

 

74.4

%

Capital Expenditures

Maintenance and recurring capital expenditures

$

4,820

$

3,926

Share of maintenance and recurring capital expenditures from unconsolidated real estate ventures

 

82

 

47

Second-generation tenant improvements and leasing commissions

 

8,594

 

6,064

Share of Second-generation tenant improvements and leasing commissions from unconsolidated real estate ventures

 

206

 

394

Recurring capital expenditures and Second-generation tenant improvements and leasing commissions

 

13,702

 

10,431

Non-recurring capital expenditures

 

12,810

 

2,836

Share of non-recurring capital expenditures from unconsolidated real estate ventures

 

12

 

51

First-generation tenant improvements and leasing commissions

 

4,450

 

835

Share of First-generation tenant improvements and leasing commissions from unconsolidated real estate ventures

 

473

 

1,192

Non-recurring capital expenditures

 

17,745

 

4,914

Total JBG SMITH Share of Capital Expenditures

$

31,447

$

15,345


(1)See page 55 for the components of Transaction and Other Costs. For the three months ended March 31, 2022 and 2021, excludes $34,000 and $1.1 million of transaction costs attributable to noncontrolling interests.
(2)Includes amounts, at JBG SMITH Share, related to unconsolidated real estate ventures.
(3)Includes straight-line rent, above/below market lease amortization and lease incentive amortization.
(4)The quarterly FAD payout ratio is not necessarily indicative of an amount for the full year due to fluctuation in the timing of capital expenditures, the commencement of new leases and the seasonality of our operations.

Graphic

Page 18


THIRD-PARTY ASSET MANAGEMENT AND REAL ESTATE SERVICES BUSINESS (NON-GAAP)

MARCH 31, 2022
(Unaudited)

Third-Party Asset Mgmt and Real Estate Services Business

 

in thousands, at JBG SMITH Share

Three Months Ended March 31, 2022

  

Source of Revenue

 

Third-Party

JBG SMITH

JBG Legacy

 

Management

JV Partner (1)

Funds

Total

 

Service Revenue

Property management fees

    

$

2,692

    

$

1,004

    

$

676

    

$

4,372

Asset management fees

 

 

425

 

1,291

 

1,716

Development fees

 

3,216

 

234

 

90

 

3,540

Leasing fees

 

1,405

 

241

 

193

 

1,839

Construction management fees

 

119

 

21

 

10

 

150

Other service revenue

 

286

 

285

 

78

 

649

Total Revenue (2)

$

7,718

$

2,210

$

2,338

$

12,266

Pro rata adjusted general and administrative expense: third-party real estate services (3)

 

 

  

 

  

 

(14,675)

Total Services Revenue Less Allocated General and Administrative Expenses (4)

 

 

$

(2,409)


(1)Service revenues from joint ventures are calculated on an asset-by-asset basis by applying our real estate venture partners' respective economic interests to the fees we earned from each consolidated and unconsolidated real estate venture.
(2)Included in "Third-party real estate services, including reimbursements" in our consolidated statement of operations are $11.0 million of reimbursement revenue and $0.7 million of service revenue from our economic interest in consolidated and unconsolidated real estate ventures that are excluded from this table.
(3)Our personnel perform services for wholly owned properties and properties we manage on behalf of third parties, real estate ventures and JBG Legacy Funds.

We allocate personnel and other costs to wholly owned properties (included in "Property operating expenses" and "General and administrative expense: corporate and other" in our consolidated statement of operations) and to properties owned by the third parties, real estate ventures and JBG Legacy Funds (included in "General and administrative expense: third-party real estate services" in our consolidated statement of operations) using estimates of the time spent performing services related to properties in the respective portfolios and other allocation methodologies.

Allocated general and administrative expenses related to real estate ventures are calculated on an asset-by-asset basis by applying our real estate venture partners' respective economic interests to the total general and administrative expenses allocated to each asset. See "Pro Rata Adjusted General and Administrative Expenses" on the next page for a reconciliation of "General and administrative expenses: third-party real estate services" to "Pro Rata Adjusted General and Administrative Expenses."

(4)Services revenue, excluding reimbursement revenue and service revenue from our economic interest in consolidated and unconsolidated real estate ventures, less allocated general and administrative expenses. Management uses this measure as a supplemental performance measure for its third-party asset management and real estate services business and believes it provides useful information to investors because it reflects only those revenue and expense items incurred by us and can be used to assess the profitability of the third-party asset management and real estate services business.

Graphic

Page 19


PRO RATA ADJUSTED GENERAL AND ADMINISTRATIVE EXPENSES
(NON-GAAP)

MARCH 31, 2022
(Unaudited)

Pro Rata Adjusted G&A

 

in thousands

Three Months Ended March 31, 2022

  

Adjustments (1)

 

Per Statement

Pro Rata

 

of Operations

A

B

C

Adjusted

 

General and Administrative Expenses

Corporate and other

    

$

15,815

    

$

    

$

    

$

1,327

    

$

17,142

Third-party real estate services

 

27,049

 

 

(11,047)

 

(1,327)

 

14,675

Share-based compensation related to Formation Transaction and special equity awards

 

2,244

 

(2,244)

 

 

 

Total

$

45,108

$

(2,244)

$

(11,047)

$

$

31,817


(1)Adjustments:

-  Removes share-based compensation related to the Formation Transaction and special equity awards.

-  Removes $11.0 million of general and administrative expenses reimbursed by third-party owners of real estate we manage related to revenue which has been excluded from Service Revenue on page 19. Revenue from reimbursements is included in "Third-party real estate services, including reimbursements" in our consolidated statement of operations.

-  Reflects an adjustment to allocate our share of general and administrative expenses of unconsolidated real estate ventures from "Third-party real estate services" to "Corporate and other" and our consolidated real estate venture partners' share of general and administrative expenses from "Corporate and other" to "Third-party real estate services."

Graphic

Page 20


OPERATING ASSETS

MARCH 31, 2022
(Unaudited)

Operating Assets

 

dollars in thousands, at JBG SMITH Share

    

    

    

    

Plus: Signed

    

Plus: Incremental

    

  

Q1 2022

But Not Yet

NOI from Assets

Adjusted

 

Operating

Annualized

Commenced

in Initial

Annualized

 

% Occupied

Portfolio NOI

NOI

Leases

Lease-up (1)

NOI

 

Commercial (2)

National Landing

86.5

%  

$

42,431

$

171,003

$

10,408

$

340

$

181,751

Other VA

86.5

%  

9,569

38,276

516

-

38,792

DC

 

69.4

%  

8,294

33,176

2,236

1,648

37,060

MD

 

81.8

%  

 

4,625

 

18,500

 

1,720

 

3,780

 

24,000

Total / weighted average

 

83.3

%  

$

64,919

$

260,955

$

14,880

$

5,768

$

281,603

Multifamily (3)

 

  

 

  

 

  

 

  

 

  

 

  

National Landing

 

94.3

%  

$

10,565

$

42,260

$

$

$

42,260

DC

 

90.9

%  

14,900

59,600

644

1,938

62,182

MD

 

83.0

%  

 

1,422

 

5,688

 

 

2,886

 

8,574

Total / weighted average

 

91.6

%  

$

26,887

$

107,548

$

644

$

4,824

$

113,016

Other (4)

 

  

 

  

 

  

 

  

 

  

 

  

DC

$

547

$

2,188

$

$

$

2,188

Total / Weighted Average

 

86.0

%  

$

92,353

$

370,691

$

15,524

$

10,592

$

396,807


Note: Includes assets sold or recapitalized subsequent to quarter end.

(1)Incremental revenue from commercial assets represents the burn-off of Free Rent and is calculated as Free Rent incurred at assets in their initial lease-up for the three months ended March 31, 2022 multiplied by four. Incremental revenue from multifamily assets in their initial lease-up is calculated as the product of units available for occupancy up to 95.0% occupancy and the weighted average monthly in-place rent per unit as of March 31, 2022, multiplied by 12, and assumes no rent growth. Excludes potential revenue from vacant retail space in multifamily assets in their initial lease-up and 900 W Street. Average in-place rents were 8.5% below asking rents as of March 31, 2022. See page 39 for more detail.
(2)Crystal City Marriott is excluded from the Percent Occupied metric.
(3)2221 S. Clark Street - Residential and 900 W Street are excluded from the Percent Occupied metric.
(4)1700 M Street (for which we are the ground lessor) is excluded from the Percent Occupied metric.

Graphic

Page 21


SUMMARY & SAME STORE NOI (NON-GAAP)

MARCH 31, 2022
(Unaudited)

Summary & Same Store NOI

 

dollars in thousands

100% Share

At JBG SMITH Share

NOI for the Three Months Ended March 31, 

 

Number of

Square Feet/

Square Feet/

%

%

Assets

Units

Units

Leased (1)

Occupied (1)

2022

2021

% Change

Same Store (2)

National Landing

27

7,338,357 SF/
2,856 Units

7,062,478 SF/
2,856 Units

89.4

%

88.5

%

$

49,879

$

45,477

9.7

%

Other VA

6

2,159,986 SF

1,501,819 SF

87.8

%

95.3

%

12,686

11,416

11.1

%

DC

    

20

    

2,760,491 SF/
2,878 Units

    

1,924,674 SF/
2,193 Units

    

85.3

%  

85.4

%  

19,935

    

17,213

    

15.8

%

MD

 

6

 

784,247 SF/
794 Units

 

784,247 SF/
444 Units

 

90.2

%  

94.6

%  

 

6,039

 

4,928

 

22.5

%

Total / weighted average

 

59

 

13,043,081 SF/
6,528 Units

 

11,273,218 SF/
5,493 Units

 

88.3

%  

88.5

%  

$

88,539

$

79,034

 

12.0

%

Non-Same Store

 

  

 

 

 

  

 

  

 

  

 

  

 

  

National Landing

 

 

 

 

$

$

 

Other VA

100

(100.0)

%

DC

 

2

 

865 Units

 

848 Units

 

91.8

%  

85.5

%  

3,806

1,508

 

152.4

%

MD

 

1

 

322 Units

 

161 Units

 

56.0

%  

41.0

%  

 

8

 

88

 

(90.9)

%

Total / weighted average

 

3

 

1,187 Units

 

1,009 Units

 

83.7

%  

75.3

%  

$

3,814

$

1,696

 

124.9

%

Total Operating Portfolio

 

  

 

 

 

  

 

  

 

  

 

  

 

  

National Landing

27

7,338,357 SF/
2,856 Units

7,062,478 SF/
2,856 Units

89.4

%  

88.5

%  

$

49,879

$

45,477

9.7

%

Other VA

6

2,159,986 SF

1,501,819 SF

87.8

%  

95.3

%  

12,686

11,516

10.2

%

DC

 

22

 

2,760,491 SF/
3,743 Units

 

1,924,674 SF/
3,041 Units

 

86.2

%  

85.4

%  

23,741

18,721

 

26.8

%

MD

 

7

 

784,247 SF/
1,116 Units

 

784,247 SF/
605 Units

 

85.4

%  

85.5

%  

 

6,047

 

5,016

 

20.6

%

Operating Portfolio -
Total / Weighted Average

 

62

 

13,043,081 SF/
7,715 Units

 

11,273,218 SF/
6,502 Units

 

88.1

%  

86.0

%  

$

92,353

$

80,730

 

14.4

%


Note: Includes assets sold or recapitalized subsequent to quarter end. Excluding these assets, Same Store NOI increased 14.9% to $76.8 million for the three months ended March 31, 2022 compared to the three months ended March 31, 2021.

(1)Crystal City Marriott, 1700 M Street (for which we are the ground lessor), 2221 S. Clark Street - Residential and 900 W Street are excluded from the Percent Leased and Percent Occupied metrics.
(2)Same Store refers to the pool of assets that were In-Service for the entirety of both periods being compared, which excludes assets for which significant redevelopment, renovation, or repositioning occurred during either of the periods being compared.

Graphic

Page 22


SUMMARY NOI (NON-GAAP)

MARCH 31, 2022
(Unaudited)

Summary NOI

 

dollars in thousands

NOI for the Three Months Ended March 31, 2022 at JBG SMITH Share

 

Consolidated

Unconsolidated

Commercial

Multifamily

Other (7)

Total

 

Number of operating assets

 

48

 

14

 

41

 

20

 

1

 

62

Property rental (1)

$

117,384

$

12,491

$

89,299

$

40,076

$

500

$

129,875

Tenant expense reimbursement

    

 

7,372

    

 

885

    

 

7,089

    

 

1,117

    

 

51

    

 

8,257

Other revenue (2)

 

12,564

 

729

 

8,965

 

4,328

 

 

13,293

Total revenue

 

137,320

 

14,105

 

105,353

 

45,521

 

551

 

151,425

Operating expenses

 

(51,904)

 

(6,832)

 

(40,094)

 

(18,638)

 

(4)

 

(58,736)

Ground rent expense

 

(301)

 

(35)

 

(340)

 

4

 

 

(336)

Total expenses

 

(52,205)

 

(6,867)

 

(40,434)

 

(18,634)

 

(4)

 

(59,072)

Operating Portfolio NOI (3)

$

85,115

$

7,238

$

64,919

$

26,887

$

547

$

92,353

Annualized NOI

$

341,739

$

28,952

$

260,955

$

107,548

$

2,188

$

370,691

Additional Information

 

  

 

  

 

  

 

  

 

  

 

  

Free Rent (at 100% share)

$

4,962

$

2,623

$

6,599

$

986

$

$

7,585

Free Rent (at JBG SMITH Share)

$

4,961

$

1,095

$

5,300

$

756

$

$

6,056

Annualized Free Rent (at JBG SMITH Share) (4)

$

19,844

$

4,380

$

21,200

$

3,024

$

$

24,224

% occupied (at JBG SMITH Share) (5)

 

86.5

%  

 

79.5

%  

 

83.3

%  

 

91.6

%  

 

 

86.0

% 

Annualized base rent of signed leases, not commenced (at 100% share) (6)

$

13,532

$

2,988

$

15,876

$

644

$

$

16,520

Annualized base rent of signed leases, not commenced (at JBG SMITH Share) (6)

$

13,532

$

1,992

$

14,880

$

644

$

$

15,524


Note: Includes assets sold or recapitalized subsequent to quarter end. Excluding these assets, Annualized NOI would have been $323.8 million for the three months ended March 31, 2022.

(1)Property rental revenue excludes straight-line rent adjustments and other GAAP adjustments, and includes payments associated with assumed lease liabilities.
(2)Includes $6.5 million of parking revenue at JBG SMITH Share.
(3)NOI excludes $4.7 million of related party management fees at JBG SMITH Share. NOI excludes $0.4 million of rent that was reserved or deferred during the quarter, net of rent recaptured during the quarter. See definition of NOI on page 52.
(4)Represents JBG SMITH's share of Free Rent for the three months ended March 31, 2022 multiplied by four.
(5)Crystal City Marriott, 1700 M Street (for which we are the ground lessor), 2221 S. Clark Street - Residential and 900 W Street are excluded from the Percent Occupied metric.
(6)Represents monthly base rent before Free Rent and straight-line rent adjustments, plus estimated tenant reimbursements for the month in which the lease commences, multiplied by 12. Includes only leases for office and retail spaces for which rent had not yet commenced as of March 31, 2022.
(7)Includes 1700 M Street for which we are the ground lessor. In 2021, the ground lessee commenced construction on the site and provided JBG SMITH a completion guarantee. The ground rent is currently $2.0 million per annum payable in quarterly installments of $500,000. The ground rent will increase to $4.95 million per annum upon substantial completion of the ground lessee’s construction but no later than December 4, 2023 and includes market escalations and CPI resets. The ground lease expires on December 4, 2117.

Graphic

Page 23


SUMMARY NOI - COMMERCIAL (NON-GAAP)

MARCH 31, 2022
(Unaudited)

Summary NOI - Commercial

dollars in thousands

NOI for the Three Months Ended March 31, 2022 at JBG SMITH Share

 

 

    

Consolidated

    

Unconsolidated

    

National Landing

Other VA

DC

    

MD

    

Total

  

Number of operating assets

 

31

 

10

 

23

6

9

 

3

 

41

Property rental (1)

$

78,924

$

10,375

$

55,593

$

12,743

$

14,068

$

6,895

$

89,299

Tenant expense reimbursement

 

6,232

 

857

 

3,700

 

1,204

 

1,918

 

267

 

7,089

Other revenue (2)

 

8,465

 

500

 

5,135

 

854

 

2,294

 

682

 

8,965

Total revenue

 

93,621

 

11,732

 

64,428

 

14,801

 

18,280

 

7,844

 

105,353

Operating expenses

 

(34,479)

 

(5,615)

 

(21,997)

 

(5,190)

 

(9,947)

 

(2,960)

 

(40,094)

Ground rent expense

 

(301)

 

(39)

 

 

(42)

 

(39)

 

(259)

 

(340)

Total expenses

 

(34,780)

 

(5,654)

 

(21,997)

 

(5,232)

 

(9,986)

 

(3,219)

 

(40,434)

Operating Portfolio NOI (3)

$

58,841

$

6,078

$

42,431

$

9,569

$

8,294

$

4,625

$

64,919

Annualized NOI

$

236,643

$

24,312

$

171,003

$

38,276

$

33,176

$

18,500

$

260,955

Additional Information

 

  

 

  

 

 

 

  

 

  

 

  

Free Rent (at 100% share)

$

4,374

$

2,225

$

1,891

$

574

$

2,958

$

1,176

$

6,599

Free Rent (at JBG SMITH Share)

$

4,374

$

926

$

1,806

$

253

$

2,065

$

1,176

$

5,300

Annualized Free Rent (at JBG SMITH Share) (4)

$

17,496

$

3,704

$

7,224

$

1,012

$

8,260

$

4,704

$

21,200

% occupied (at JBG SMITH Share) (5)

 

83.3

%  

 

82.6

%  

 

86.5

%

 

86.5

%

69.4

%  

 

81.8

%  

 

83.3

% 

Annualized base rent of signed leases, not commenced (at 100% share) (6)

$

12,888

$

2,988

$

10,408

$

704

$

3,044

$

1,720

$

15,876

Annualized base rent of signed leases, not commenced (at JBG SMITH Share) (6)

$

12,888

$

1,992

$

10,408

$

516

$

2,236

$

1,720

$

14,880


Note: Includes assets sold or recapitalized subsequent to quarter end. Excluding these assets, Annualized NOI would have been $214.2 million for the three months ended March 31, 2022.

(1)Property rental revenue excludes straight-line rent adjustments and other GAAP adjustments, and includes payments associated with assumed lease liabilities.
(2)Includes $5.0 million of parking revenue at JBG SMITH Share. Parking revenue in our commercial portfolio during the quarter was approximately 65% of pre-pandemic levels of approximately $30 million annually.
(3)NOI excludes $3.2 million of related party management fees at JBG SMITH Share. NOI excludes $0.2 million of rent that was reserved or deferred during the quarter, net of rent recaptured during the quarter. See definition of NOI on page 52.
(4)Represents JBG SMITH's share of Free Rent for the three months ended March 31, 2022 multiplied by four.
(5)Crystal City Marriott is excluded from the Percent Occupied metric.
(6)Represents monthly base rent before Free Rent and straight-line rent adjustments, plus estimated tenant reimbursements for the month in which the lease commences, multiplied by 12. Includes only leases for office and retail spaces for which rent had not yet commenced as of March 31, 2022.

Graphic

Page 24


SUMMARY NOI - MULTIFAMILY (NON-GAAP)

MARCH 31, 2022
(Unaudited)

Summary NOI - Multifamily

dollars in thousands

NOI for the Three Months Ended March 31, 2022 at JBG SMITH Share

 

    

Consolidated

    

Unconsolidated

National Landing

    

DC

    

MD

    

Total

  

 

Number of operating assets

 

16

 

4

4

 

12

 

4

 

20

Property rental (1)

$

37,960

$

2,116

$

16,207

$

21,261

$

2,608

$

40,076

Tenant expense reimbursement

 

1,089

 

28

 

81

 

1,023

 

13

 

1,117

Other revenue (2)

 

4,099

 

229

 

1,943

 

2,144

 

241

 

4,328

Total revenue

 

43,148

 

2,373

 

18,231

 

24,428

 

2,862

 

45,521

Operating expenses

 

(17,421)

 

(1,217)

 

(7,666)

 

(9,528)

 

(1,444)

 

(18,638)

Ground rent expense

 

 

4

 

 

 

4

 

4

Total expenses

 

(17,421)

 

(1,213)

 

(7,666)

 

(9,528)

 

(1,440)

 

(18,634)

Operating Portfolio NOI (3)

$

25,727

$

1,160

$

10,565

$

14,900

$

1,422

$

26,887

Annualized NOI

$

102,908

$

4,640

$

42,260

$

59,600

$

5,688

$

107,548

Additional Information

 

  

 

  

 

  

 

  

 

  

 

  

Free Rent (at 100% share)

$

588

$

398

$

351

$

315

$

320

$

986

Free Rent (at JBG SMITH Share)

$

587

$

169

$

351

$

256

$

149

$

756

Annualized Free Rent (at JBG SMITH Share) (4)

$

2,348

$

676

$

1,404

$

1,024

$

596

$

3,024

% occupied (at JBG SMITH Share) (5)

 

93.0

%  

 

71.2

%

 

94.3

%  

 

90.9

%  

 

83.0

%  

 

91.6

% 

Annualized base rent of signed leases, not commenced (at 100% share) (6)

$

644

$

$

$

644

$

$

644

Annualized base rent of signed leases, not commenced (at JBG SMITH Share) (6)

$

644

$

$

$

644

$

$

644


(1)Property rental revenue excludes straight-line rent adjustments and other GAAP adjustments, and includes payments associated with assumed lease liabilities. Average in-place rents were 8.5% below asking rents as of March 31, 2022.
(2)Includes $1.5 million of parking revenue at JBG SMITH Share
(3)NOI excludes $1.5 million of related party management fees at JBG SMITH Share. NOI excludes $0.2 million of rent that was reserved or deferred during the quarter, net of rent recaptured during the quarter. See definition of NOI on page 52.
(4)Represents JBG SMITH's share of Free Rent for the three months ended March 31, 2022 multiplied by four.
(5)2221 S. Clark Street – Residential and 900 W Street are excluded from the Percent Occupied metric.
(6)Represents monthly base rent before Free Rent and straight-line rent adjustments, plus estimated tenant reimbursements for the month in which the lease commences, multiplied by 12. Includes only leases for office and retail spaces for which rent had not yet commenced as of March 31, 2022.

Graphic

Page 25


NOI RECONCILIATIONS (NON-GAAP)

MARCH 31, 2022
(Unaudited)

NOI Reconciliations

 

dollars in thousands

Three Months Ended March 31, 

 

2022

    

2021

Net loss attributable to common shareholders

$

(32)

$

(20,731)

Add:

  

  

Depreciation and amortization expense

58,062

64,726

General and administrative expense:

  

  

Corporate and other

15,815

12,475

Third-party real estate services

27,049

28,936

Share-based compensation related to Formation Transaction and special equity awards

2,244

4,945

Transaction and Other Costs

899

3,690

Interest expense

16,278

16,296

Loss on the extinguishment of debt

591

Income tax expense (benefit)

(471)

4,315

Net income (loss) attributable to redeemable noncontrolling interests

10

(2,230)

Net loss attributable to noncontrolling interests

(55)

(1,108)

Less:

  

  

Third-party real estate services, including reimbursements revenue

23,970

38,107

Other revenue

2,196

2,186

Income (loss) from unconsolidated real estate ventures, net

3,145

(943)

Interest and other income, net

14,246

9

Loss on the sale of real estate

(136)

Consolidated NOI

76,969

71,955

NOI attributable to unconsolidated real estate ventures at our share

6,967

7,512

Non-cash rent adjustments (1)

(1,791)

(4,765)

Other adjustments (2)

8,760

4,738

Total adjustments

13,936

7,485

NOI

$

90,905

$

79,440

Less: out-of-service NOI loss (3)

(1,448)

(1,361)

Operating Portfolio NOI

$

92,353

$

80,801

Non-Same Store NOI (4)

3,814

1,767

Same Store NOI (5)

$

88,539

$

79,034

Change in Same Store NOI

12.0

%

Number of properties in Same Store pool

59


(1)Adjustment to exclude straight-line rent, above/below market lease amortization and lease incentive amortization.
(2)Adjustment to include other revenue and payments associated with assumed lease liabilities related to operating properties and to exclude commercial lease termination revenue and allocated corporate general and administrative expenses to operating properties.
(3)Includes the results of our Under-Construction assets, and Near-Term and Future Development Pipelines.
(4)Includes the results of properties that were not In-Service for the entirety of both periods being compared and properties for which significant redevelopment, renovation or repositioning occurred during either of the periods being compared.
(5)Includes the results of the assets that are owned, operated and In-Service for the entirety of both periods being compared.

Graphic

Page 26


LEASING ACTIVITY - OFFICE

MARCH 31, 2022
(Unaudited)

Leasing Activity - Office

 

square feet in thousands

Three Months Ended

 

March 31, 2022

 

Square feet leased:

  

At 100% share

225

At JBG SMITH Share

210

First-generation space: New

23

Second-generation space: New

71

Second-generation space: Renewal

116

Initial rent (1)

$

53.78

Straight-line rent (2)

$

53.49

Weighted average lease term (years)

 

5.8

Weighted average Free Rent period (months)

 

9.4

Second-generation space:

 

Square feet

 

187

Cash basis:

 

  

Initial rent (1)

$

54.86

Prior escalated rent

$

55.46

% change

 

(1.1)

%

GAAP basis:

 

  

Straight-line rent (2)

$

54.45

Prior straight-line rent

$

49.96

% change

 

9.0

%

Tenant improvements:

 

  

Per square foot

$

62.14

Per square foot per annum

$

10.80

% of initial rent

 

20.1

%

Leasing commissions:

 

  

Per square foot

$

13.06

Per square foot per annum

$

2.27

% of initial rent

 

4.2

%


Note: At JBG SMITH Share, unless otherwise indicated. The leasing activity and related statistics are based on leases signed during the period and are not intended to coincide with the commencement of property rental revenue in accordance with GAAP. Second-generation space represents square footage that was vacant for less than nine months. Weighted average lease term is weighted by SF and weighted average Free Rent period is weighted by Annualized Rent.

(1)Represents the cash basis weighted average starting rent per square foot, which is generally indicative of market rents. Triple net leases are converted to a gross basis by adding estimated tenant reimbursements to monthly base rent. Most leases include Free Rent and periodic step-ups in rent which are not included in the initial cash basis rent per square foot but are included in the GAAP basis rent per square foot.
(2)Represents the GAAP basis weighted average rent per square foot that is recognized over the term of the respective leases, including the effect of Free Rent and fixed step-ups in rent.

Graphic

Page 27


NET EFFECTIVE RENT - OFFICE

MARCH 31, 2022
(Unaudited)

Net Effective Rent - Office

square feet in thousands, dollars per square feet, at JBG SMITH Share

Three Months Ended

 

 

    

Five Quarter 
Weighted Average

    

March 31, 2022

    

December 31, 2021

    

September 30, 2021

    

June 30, 2021

    

March 31, 2021

 

Square feet

 

372

 

210

 

468

 

126

 

715

 

344

Weighted average lease term (years)

 

5.4

 

5.8

 

8.0

 

5.4

 

4.2

 

4.3

Initial rent (1)

$

46.51

$

53.78

$

44.41

$

44.82

$

44.96

$

48.73

Base rent per annum (2)

$

51.40

$

65.64

$

46.32

$

45.78

$

50.38

$

53.75

Tenant improvements per annum

 

(5.23)

 

(10.80)

 

(3.00)

 

(4.68)

 

(5.60)

 

(4.26)

Leasing commissions per annum

 

(1.58)

 

(2.27)

 

(1.51)

 

(0.90)

 

(1.43)

 

(1.82)

Free Rent per annum

 

(5.08)

 

(7.31)

 

(4.79)

 

(3.60)

 

(4.79)

 

(5.24)

Net Effective Rent

$

39.51

$

45.26

$

37.02

$

36.60

$

38.56

$

42.43

National Landing

 

  

 

  

 

  

 

  

 

  

 

  

Square feet

 

293

 

119

 

337

 

89

 

639

 

282

Initial rent (1)

$

44.76

$

49.22

$

43.58

$

44.85

$

43.46

$

47.20

Net effective rent

$

36.88

$

41.04

$

35.64

$

35.36

$

35.77

$

39.57

Other VA

 

  

 

  

 

  

 

  

 

  

 

  

Square feet

 

19

 

7

 

60

 

16

 

12

 

2

Initial rent (1)

$

40.74

$

42.54

$

38.05

$

42.95

$

47.77

$

61.00

Net effective rent

$

35.43

$

38.30

$

33.53

$

40.43

$

35.75

$

42.01

DC

 

  

 

  

 

  

 

  

 

  

 

  

Square feet

 

22

 

 

32

 

9

 

45

 

22

Initial rent (1)

$

60.96

$

$

62.30

$

50.75

$

62.54

$

60.21

Net effective rent

$

51.93

$

$

52.86

$

43.86

$

51.57

$

54.77

MD

 

  

 

  

 

  

 

  

 

  

 

  

Square feet

 

21

 

 

38

 

11

 

19

 

38

Initial rent (1)

$

49.52

$

$

46.74

$

42.27

$

52.57

$

52.96

Net effective rent

$

41.15

$

$

36.08

$

32.33

$

40.17

$

49.40


Note: Leasing activity and related statistics are based on leases signed during the period and are not intended to coincide with the recognition of property rental revenue in accordance with GAAP. Weighted average lease term is weighted by SF and weighted average Free Rent period is weighted by Annualized Rent.

(1)Represents the cash basis weighted average starting rent per square foot, which is generally indicative of market rents. Triple net leases are converted to a gross basis by adding estimated tenant reimbursements to monthly base rent. Most leases include Free Rent and periodic step-ups in rent which are not included in the initial cash basis rent per square foot.
(2)Represents the weighted average base rent before Free Rent, plus estimated tenant reimbursements recognized over the term of the respective leases, including the effect of fixed step-ups in rent, divided by SF, and divided by years of lease term. Triple net leases are converted to a gross basis by adding estimated tenant reimbursements to base rent. Tenant reimbursements are estimated by escalating tenant reimbursements as of the respective reporting period, or management's estimate thereof, by 2.75% annually through the lease expiration year.

Graphic

Page 28


LEASE EXPIRATIONS

MARCH 31, 2022
(Unaudited)

Lease Expirations

At JBG SMITH Share

    

    

    

    

    

    

    

Estimated

 

% of

Annualized

 

% of

Annualized

Total

Annualized

Rent Per

 

Number

Total

Rent (1)

Annualized

Rent Per

Square Foot at

 

 

Year of Lease Expiration

of Leases

Square Feet

Square Feet

(in thousands)

Rent

Square Foot (1)

Expiration (1) (2)

 

Month-to-Month

 

38

 

56,428

 

0.7

%  

$

845

 

0.2

%  

$

14.98

$

14.98

2022

 

68

 

596,414

 

7.6

%  

 

24,267

 

6.7

%  

 

40.69

 

40.80

2023

 

108

 

891,288

 

11.3

%  

 

39,030

 

10.8

%  

 

43.79

 

45.07

2024

 

76

 

1,381,586

 

17.6

%  

 

64,056

 

17.8

%  

 

46.36

 

48.27

2025

 

76

 

822,487

 

10.5

%  

 

36,529

 

10.1

%  

 

44.41

 

47.11

2026

 

63

 

250,051

 

3.2

%  

 

11,990

 

3.3

%  

 

47.95

 

52.30

2027

 

41

 

509,905

 

6.5

%  

 

24,063

 

6.7

%  

 

47.19

 

52.39

2028

 

46

 

398,533

 

5.1

%  

 

18,800

 

5.2

%  

 

47.17

 

54.81

2029

 

25

 

143,184

 

1.8

%  

 

6,679

 

1.9

%  

 

46.64

 

54.40

2030

 

27

 

393,822

 

5.0

%  

 

21,938

 

6.1

%  

 

55.71

 

67.54

Thereafter

 

102

 

2,412,342

 

30.7

%  

 

112,365

 

31.2

%  

 

47.35

 

60.26

Total / Weighted Average

 

670

 

7,856,040

 

100.0

%  

$

360,562

 

100.0

%  

$

46.13

$

52.43


Note: Includes all in-place leases as of March 31, 2022 for office and retail space within our operating portfolio and assuming no exercise of renewal options or early termination rights. The weighted average remaining lease term for the entire portfolio is 5.9 years. Excludes assets sold and recapitalized subsequent to quarter end.

(1)Annualized Rent and Annualized Rent per Square Foot exclude percentage rent and the square footage of tenants that only pay percentage rent.
(2)Represents monthly base rent before Free Rent, plus tenant reimbursements, as of lease expiration multiplied by 12 and divided by SF. Triple net leases are converted to a gross basis by adding tenant reimbursements to monthly base rent. Tenant reimbursements at lease expiration are estimated by escalating tenant reimbursements as of March 31, 2022, or management’s estimate thereof, by 2.75% annually through the lease expiration year.

Graphic

Page 29


SIGNED BUT NOT YET COMMENCED LEASES

MARCH 31, 2022
(Unaudited)

Signed But Not Yet Commenced Leases

 

in thousands, at JBG SMITH Share

Total 

 

Annualized

Estimated 

Estimated Rent (1) for the Quarter Ending

Assets

    

C/U (2)

    

Rent (3)

    

June 30, 2022

    

September 30, 2022

    

December 31, 2022

    

March 31, 2023

    

June 30, 2023

    

September 30, 2023

 

 

Commercial

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Operating

 

C

$

12,888

$

1,086

$

2,832

$

3,063

$

3,145

$

3,222

$

3,222

Operating

 

U

 

1,992

 

47

 

297

 

425

 

445

 

497

 

498

Total

$

14,880

$

1,133

$

3,129

$

3,488

$

3,590

$

3,719

$

3,720

Multifamily

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Operating

C

$

644

$

40

$

123

$

124

$

124

$

124

$

160

Total

$

15,524

$

1,173

$

3,252

$

3,612

$

3,714

$

3,843

$

3,880


Note: Includes only leases for office and retail spaces for which rent had not yet commenced as of March 31, 2022. Includes assets sold or recapitalized subsequent to quarter end.

(1)Represents contractual monthly base rent before Free Rent, plus estimated tenant reimbursements for the month in which the lease is estimated to commence, multiplied by the applicable number of months for each quarter based on the lease's estimated commencement date.
(2)"C" denotes a consolidated interest. "U" denotes an unconsolidated interest.
(3)Represents contractual monthly base rent before Free Rent, plus estimated tenant reimbursements for the month in which the lease is expected to commence, multiplied by 12.

Graphic

Page 30


TENANT CONCENTRATION

MARCH 31, 2022
(Unaudited)

Tenant Concentration

 dollars in thousands

    

    

    

At JBG SMITH Share

 

Tenant

Number of Leases

Square Feet

% of Total Square Feet

Annualized 
Rent

% of Total Annualized Rent

 

1

U.S. Government (GSA)

53

2,128,051

27.1

%  

$

85,459

23.7

% 

2

 

Amazon

8

1,035,347

 

13.2

%  

44,559

 

12.4

%

3

 

Gartner, Inc

1

174,424

 

2.2

%  

12,397

 

3.4

%

4

 

Lockheed Martin Corporation

2

232,598

 

3.0

%  

11,616

 

3.2

%

5

 

Booz Allen Hamilton Inc

3

159,610

 

2.0

%  

7,838

 

2.2

%

6

 

Accenture LLP

2

116,736

 

1.5

%  

7,207

 

2.0

%

7

 

Greenberg Traurig LLP

1

101,602

 

1.3

%  

7,196

 

2.0

%

8

 

Public Broadcasting Service

1

120,328

 

1.5

%  

4,737

 

1.3

%

9

 

Evolent Health LLC

1

90,905

 

1.2

%  

4,615

 

1.3

%

10

 

Goodwin Procter LLP

1

51,296

 

0.7

%  

4,558

 

1.3

%

11

 

The International Justice Mission

1

74,833

 

1.0

%  

4,237

 

1.2

%

12

 

Host Hotels & Resorts LP

1

55,009

 

0.7

%  

4,127

 

1.1

%

13

American Diabetes Association

1

80,998

1.0

%  

3,599

1.0

%

14

 

Willis Towers Watson US LLC

1

61,653

 

0.8

%  

3,152

 

0.9

%

15

 

CBRE Inc

2

38,079

 

0.5

%  

3,149

 

0.9

%

16

 

National Consumer Cooperative

1

65,736

 

0.8

%  

3,141

 

0.9

%

17

 

WeWork

1

41,647

 

0.5

%  

2,840

 

0.8

%

18

 

Management System Intl Inc

1

50,069

 

0.6

%  

2,816

 

0.8

%

19

 

Whole Foods Market Group Inc

2

79,869

 

1.0

%  

2,616

 

0.7

%

20

 

Cushman & Wakefield U.S. Inc

1

38,008

 

0.5

%  

2,471

 

0.7

%

 

Other (1)

585

3,059,242

 

38.9

%  

138,232

 

38.2

%

 

Total

670

7,856,040

 

100.0

%  

$

360,562

 

100.0

%


Note: Includes all leases as of March 31, 2022 for which a tenant has taken occupancy for office and retail space within our operating portfolio. Excludes assets sold and recapitalized subsequent to quarter end.

(1)Includes JBG SMITH's lease for approximately 84,400 SF at 4747 Bethesda Avenue.

Graphic

Page 31


INDUSTRY DIVERSITY

MARCH 31, 2022
(Unaudited)

Industry Diversity

  dollars in thousands

At JBG SMITH Share

 

    

    

Number of

    

    

% of Total

    

Annualized

    

% of Total

 

Industry

Leases

Square Feet

Square Feet

Rent

Annualized Rent

 

1

 

Government

 

61

 

2,187,412

 

27.8

%  

$

88,246

 

24.5

% 

2

 

Business Services

 

86

 

1,815,268

 

23.1

%  

 

87,556

 

24.3

%

3

 

Government Contractors

 

52

 

946,952

 

12.1

%  

 

43,830

 

12.2

%

4

 

Member Organizations

 

43

 

611,007

 

7.8

%  

 

30,132

 

8.4

%

5

 

Real Estate

 

36

 

362,826

 

4.6

%  

 

18,980

 

5.3

%

6

 

Legal Services

 

22

 

224,251

 

2.9

%  

 

16,484

 

4.6

%

7

 

Health Services

 

31

 

270,520

 

3.4

%  

 

10,774

 

3.0

%

8

 

Food and Beverage

 

89

 

180,712

 

2.3

%  

 

10,105

 

2.8

%

9

 

Communications

 

6

 

127,612

 

1.6

%  

 

5,086

 

1.4

%

10

 

Educational Services

 

11

 

80,578

 

1.0

%  

 

3,691

 

1.0

%

 

Other

 

233

 

1,048,902

 

13.4

%  

 

45,678

 

12.5

%

 

Total

 

670

 

7,856,040

 

100.0

%  

$

360,562

 

100.0

%


Note: Includes all in-place leases as of March 31, 2022 for office and retail space within our operating portfolio. Excludes assets sold and recapitalized subsequent to quarter end.

Graphic

Page 32


PORTFOLIO SUMMARY

MARCH 31, 2022
(Unaudited)

Portfolio Summary

Potential

 

Number

Rentable

Number of

Development

 

of Assets

Square Feet

Units (1)

Density (2)

 

 

 

Wholly Owned

    

  

    

  

    

  

    

  

Operating

 

47

 

14,958,815

 

5,691

 

Under-Construction (3)

 

2

 

1,214,951

 

1,583

 

Near-Term Development

7

3,718,900

Future Development

 

12

 

 

 

9,351,800

Total (4)

 

68

 

16,173,766

 

7,274

 

13,070,700

Real Estate Ventures

 

  

 

  

 

  

 

  

Operating

 

15

 

4,625,541

 

2,024

 

Under-Construction

Near-Term Development

 

2

 

 

 

419,400

Future Development

 

8

 

 

 

3,670,600

Total

 

25

 

4,625,541

 

2,024

 

4,090,000

Total Portfolio

93

 

20,799,307

 

9,298

 

17,160,700

Total Portfolio (at JBG SMITH Share)

93

 

17,919,212

 

8,085

 

14,425,000


Note: At 100% share, unless otherwise indicated.

(1)For Under-Construction assets, represents estimated number of units based on current design plans.
(2)Includes estimated potential office, multifamily and retail development density.
(3)See footnotes (3) and (4) on page 41.

Graphic

Page 33


PROPERTY TABLE - COMMERCIAL

MARCH 31, 2022
(Unaudited)

Property Table - Commercial

    

    

    

    

    

    

    

    

    

    

    

    

    

Office

    

 

Annualized

Retail

 

Same Store (2):

Annualized

Rent Per

Annualized

 

%

Q1 20212022 /

Year Built /

Total

Office

Retail

%

Office %

Retail %

Rent

Square

Rent Per

 

Commercial Assets

Submarket

Ownership

C/U (1)

YTD 2021 - 2022

Renovated

Square Feet

Square Feet

Square Feet

Leased

Occupied

Occupied

(in thousands)

Foot (3)

Square Foot (4)

 

National Landing

 

  

 

  

 

  

 

  

 

 

 

 

 

 

1550 Crystal Drive (5)

National Landing

 

100.0

%  

C

 

Y / Y

 

1980 / 2020

 

550,219

 

449,754

100,465

95.6%

92.7%

98.5%

$

21,984

$

41.79

$

46.13

2121 Crystal Drive

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1985 / 2006

 

505,349

 

505,349

71.3%

71.3%

 

17,228

 

47.81

 

2345 Crystal Drive

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1988 / 2019

 

499,663

 

491,771

7,892

87.3%

87.1%

100.0%

 

20,721

 

48.10

 

16.17

2231 Crystal Drive

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1987 / 2009

 

468,906

 

416,979

51,927

89.7%

88.4%

97.4%

 

18,173

 

44.06

 

38.12

2011 Crystal Drive

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1984 / 2006

 

440,996

 

434,234

6,762

56.7%

52.7%

50.3%

 

11,233

 

48.57

 

37.61

2451 Crystal Drive

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1990 / 2019

 

401,902

 

389,845

12,057

76.9%

76.4%

92.6%

 

12,766

 

47.64

 

39.75

1235 S. Clark Street

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1981 / 2007

 

384,753

 

336,407

48,346

96.1%

95.9%

97.2%

 

15,405

 

44.24

 

23.97

241 18th Street S.

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1977 / 2013

 

363,084

 

333,911

29,173

97.4%

97.5%

85.0%

 

13,566

 

40.22

 

18.77

251 18th Street S. (5)

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1975 / 2013

 

337,886

 

293,818

44,068

90.6%

99.0%

34.6%

 

13,465

 

43.81

 

47.48

1215 S. Clark Street

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1983 / 2016

 

336,159

 

333,546

2,613

100.0%

100.0%

100.0%

 

11,159

 

33.18

 

35.17

201 12th Street S.

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1987 / 2014

 

329,607

 

317,394

12,213

98.0%

97.9%

100.0%

 

11,845

 

36.45

 

42.04

2200 Crystal Drive

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1968 / 2006

 

283,608

 

283,608

57.0%

57.0%

 

7,422

 

45.91

 

1225 S. Clark Street

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1982 / 2013

 

276,155

 

263,305

12,850

97.1%

94.1%

100.0%

 

10,232

 

40.06

 

24.12

1901 South Bell Street (5)

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1968 / 2008

 

275,037

 

275,037

92.1%

92.1%

 

10,289

 

40.60

 

1770 Crystal Drive

National Landing

100.0

%  

C

Y / Y

2020 / N/A

273,650

259,651

13,999

98.4%

100.0%

68.5%

11,805

43.29

59.05

Crystal City Marriott (345 Rooms) (6)

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1968 / 2013

 

266,000

 

 

 

 

2100 Crystal Drive

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1968 / 2006

 

253,437

 

253,437

100.0%

100.0%

 

10,598

 

41.82

 

1800 South Bell Street

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1969 / 2019

 

206,186

 

190,984

15,202

99.2%

100.0%

88.8%

8,402

43.67

4.55

200 12th Street S.

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1985 / 2013

 

202,708

 

202,708

79.5%

79.5%

 

7,721

 

47.89

 

Crystal City Shops at 2100 (5)

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1968 / 2006

 

53,174

 

53,174

81.3%

81.3%

 

519

 

 

11.99

Crystal Drive Retail (5)

 

National Landing

 

100.0

%  

C

 

Y / Y

 

2003 / 2004

 

42,938

 

42,938

100.0%

100.0%

 

2,665

 

 

62.06

2221 S. Clark Street-Office

National Landing

100.0

%  

C

 

Y / Y

1964 / 2016

35,182

26,238

8,944

Central Place Tower (7)

Rosslyn

50.0

%

U

Y / Y

2018 / N/A

551,758

524,480

27,278

98.4%

98.3%

100.0%

36,714

69.68

29.39

 Other VA

 

  

 

  

 

  

 

  

 

 

 

 

 

 

800 North Glebe Road

 

Ballston

 

100.0

%  

C

 

Y / Y

 

2012 / N/A

 

303,644

 

277,397

26,247

98.5%

100.0%

82.3%

$

16,281

$

54.99

$

47.60

Stonebridge at Potomac Town
Center (8)

 

Prince William County

 

10.0

%  

U

 

Y / Y

 

2012 / N/A

 

504,327

 

504,327

97.1%

96.3%

 

15,809

 

 

32.54

Rosslyn Gateway-North

 

Rosslyn

 

18.0

%  

U

 

Y / Y

 

1996 / 2014

 

145,765

 

133,011

12,754

63.5%

52.8%

72.3%

 

3,260

 

41.96

 

34.18

Rosslyn Gateway-South

 

Rosslyn

 

18.0

%  

U

 

Y / Y

 

1961 / N/A

 

103,349

 

95,765

7,584

77.5%

78.4%

40.4%

 

2,000

 

24.78

 

45.74

Graphic

Page 34


PROPERTY TABLE - COMMERCIAL

MARCH 31, 2022
(Unaudited)

    

    

    

    

    

    

    

    

    

    

    

    

    

Office

    

 

Annualized

Retail

 

Same Store (2):

Annualized

Rent Per

Annualized

 

%

Q1 20212022 /

Year Built /

Total

Office

Retail

%

Office %

Retail %

Rent

Square

Rent Per

 

 Commercial Assets

Submarket

Ownership

C/U (1)

YTD 2021 - 2022

Renovated

Square Feet

Square Feet

Square Feet

Leased

Occupied

Occupied

(in thousands)

Foot (3)

Square Foot (4)

 

 DC

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

2101 L Street

 

CBD

 

100.0

%  

C

 

Y / Y

 

1975 / 2007

 

375,047

 

343,727

31,320

84.6%

63.2%

92.6%

$

16,263

$

67.24

$

56.73

L’Enfant Plaza Office-East (7)

 

Southwest

 

49.0

%  

U

 

Y / Y

 

1972 / 2012

 

397,855

 

397,855

63.4%

63.4%

 

12,673

 

50.20

 

L’Enfant Plaza Office-North

 

Southwest

 

49.0

%  

U

 

Y / Y

 

1969 / 2014

 

298,567

 

277,243

21,324

90.5%

90.7%

87.1%

 

12,500

 

48.08

 

21.95

L’Enfant Plaza Retail (7)

 

Southwest

 

49.0

%  

U

 

Y / Y

 

1968 / 2014

 

119,291

 

16,596

102,695

68.5%

100.0%

63.4%

 

3,982

 

47.91

 

48.92

1900 N Street (7)

CBD

55.0

%

U

Y / Y

2019 / N/A

269,501

260,778

8,723

82.8%

76.4%

21.5%

17,361

86.38

77.54

The Foundry

 

Georgetown

 

9.9

%  

U

 

Y / Y

 

1973 / 2017

 

226,823

 

219,969

6,854

82.9%

80.9%

100.0%

 

9,225

 

50.26

 

40.72

1101 17th Street

 

CBD

 

55.0

%  

U

 

Y / Y

 

1964 / 1999

 

209,108

 

199,354

9,754

87.5%

83.5%

100.0%

 

9,754

 

54.36

 

71.78

 MD

 

  

 

  

 

  

 

  

 

 

 

 

 

 

4747 Bethesda Avenue (9)

Bethesda CBD

100.0

%

C

Y / Y

2019 / N/A

300,508

286,199

14,309

98.0%

96.2%

100.0%

$

20,291

$

67.27

$

123.63

One Democracy Plaza (7) (8)

 

Bethesda- Rock Spring

 

100.0

%  

C

 

Y / Y

 

1987 / 2013

 

212,922

 

210,784

2,138

86.9%

86.8%

100.0%

 

6,052

 

32.72

 

31.89

 Operating - Total / Weighted Average

 

  

 

  

 

  

 

  

 

10,805,064

 

9,301,134

1,237,930

86.8%

84.8%

88.1%

$

419,363

$

48.25

$

37.16

 Total at JBG SMITH Share

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

National Landing

 

  

 

  

 

  

 

  

 

  

 

7,062,478

 

6,320,216

476,262

87.1%

86.5%

86.0%

$

255,552

$

44.36

$

35.73

Other VA

398,918

318,577

80,341

95.0%

95.3%

90.1%

18,809

53.10

37.17

DC

1,060,375

957,451

102,924

80.6%

72.2%

74.9%

46,373

61.45

50.57

MD

 

  

 

  

 

  

 

  

 

  

 

513,430

 

496,983

16,447

93.4%

92.2%

100.0%

26,344

53.48

111.69

 Operating - Total / Weighted Average

 

  

 

  

 

  

 

  

 

9,035,201

 

8,093,227

675,974

87.0%

85.5%

85.1%

$

347,078

$

47.07

$

40.07

Held for Sale

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Universal Buildings (10)

Uptown

100.0

%  

C

Y / Y

1956 / 1999

659,459

568,351

91,108

64.1%

58.4%

99.6%

$

23,263

$

54.08

$

58.41

Courthouse Plaza 1 and 2 (7) (11)

Clarendon/Courthouse

100.0

%  

C

Y / Y

1989 / 2013

632,836

573,060

59,776

82.3%

80.9%

94.6%

23,121

45.73

34.18

RTC - West (5) (11)

Reston

100.0

%  

C

Y / Y

1988 / 2014

470,065

430,602

39,463

89.3%

87.6%

93.3%

16,351

41.48

65.83

1730 M Street (7) (11)

CBD

100.0

%  

C

Y / Y

1964 / 1998

204,840

196,822

8,018

87.8%

87.3%

100.0%

9,211

51.17

52.57

7200 Wisconsin Avenue (11)

Bethesda CBD

100.0

%  

C

Y / Y

1986 / 2015

270,817

259,851

10,966

72.5%

61.9%

100.0%

7,119

39.54

68.98

Total

 

  

 

  

 

  

 

  

 

2,238,017

2,028,686

209,331

77.7%

74.2%

97.0%

$

79,065

$

46.61

$

53.35

Operating - Total / Weighted Average, Including Held for Sale

13,043,081

11,329,820

1,447,261

85.2%

82.9%

89.4%

$

498,428

$

47.99

$

39.70

Operating - Total / Weighted Average at JBG SMITH Share, Including Held for Sale

11,273,218

10,121,913

885,305

85.2%

83.3%

87.9%

$

426,143

$

46.99

$

43.53

Graphic

Page 35


PROPERTY TABLE - COMMERCIAL

MARCH 31, 2022
(Unaudited)

 

Number of Assets and Total Square Feet Reconciliation

 

    

Number of

    

At 100% Share

    

At JBG SMITH Share

 

Operating Assets

Assets

Square Feet

Square Feet

 

Q4 2021

 

42

 

13,083,094

 

11,314,838

Placed into service

 

 

 

Held for sale (10) (11)

 

(5)

 

(2,238,017)

 

(2,238,017)

Out-of-service adjustment

 

 

(6,901)

 

(6,901)

Portfolio reclassification (12)

(1)

(34,000)

(34,000)

Building re-measurements

 

 

888

 

(719)

Q1 2022

 

36

 

10,805,064

 

9,035,201

See footnotes on page 37.

Graphic

Page 36


PROPERTY TABLE - COMMERCIAL

MARCH 31, 2022
(Unaudited)

Footnotes

Note:  At 100% share, unless otherwise noted. Excludes our 10% subordinated interest in one commercial building held through a real estate venture in which we have no economic interest.

(1)"C" denotes a consolidated interest. "U" denotes an unconsolidated interest.
(2)"Y" denotes an asset as Same Store and "N" denotes an asset as Non-Same Store.
(3)Represents annualized office rent divided by occupied office SF; annualized retail rent and retail SF are excluded from this metric. Annualized Rent and Annualized Rent per Square Foot exclude percentage rent and the square footage of tenants that only pay percentage rent. Occupied office square footage may differ from leased office square footage because leased office square footage includes space for leases that have been signed but the tenant has not yet taken occupancy (not yet included in Percent Occupied metrics).
(4)Represents annualized retail rent divided by occupied retail SF. Occupied retail square footage may differ from leased retail square footage because leased retail square footage includes space for leases that have been signed but the tenant has not yet taken occupancy (not yet included in Percent Occupied metrics).
(5)The following assets contain space that is held for development or not otherwise available for lease. This out-of-service square footage is excluded from Square Feet, leased and occupancy metrics.

Not Available

 

Commercial Asset

    

In-Service

    

for Lease

 

1550 Crystal Drive

550,219

1,721

251 18th Street S.

337,886

1,480

1901 South Bell Street

275,037

1,924

Crystal City Shops at 2100

53,174

19,041

Crystal Drive Retail

42,938

14,027

RTC - West

470,065

17,988

(6)Under the current management agreement, JBG SMITH receives 50% of the net cash flows from the hotel. Upon expiration on July 31, 2025, JBG SMITH expects to receive 100% of the cash flows. The Crystal City Marriott generated $0.3 million of Annualized NOI at JBG SMITH’s share for the three months ended March 31, 2022. The Crystal City Marriott generated $1.8 million of NOI at JBG SMITH’s share in 2019 while undergoing a rooms renovation and $3.5 million of NOI at JBG SMITH’s share in 2018 before the renovation began.
(7)The following assets are subject to ground leases:

    

Ground Lease

 

Commercial Asset

Expiration Date

 

Central Place Tower (a)(b)

 

6/2/2102

L'Enfant Plaza Office - East

 

11/23/2064

L'Enfant Plaza Retail

 

11/23/2064

1900 N Street (c)

 

5/31/2106

One Democracy Plaza

 

11/17/2084

Courthouse Plaza 1 and 2 (a)

1/19/2062

1730 M Street (a)

12/31/2118

(a)The ground lease is recorded as a financing lease for accounting purposes; therefore, any expense is recorded as interest expense and excluded from NOI.
(b)We have an option to purchase the ground lease at a fixed price
(c)Only a portion of the asset is subject to a ground lease.

(8)Not Metro-Served.
(9)Includes JBG SMITH's share for approximately 84,400 SF.
(10)In April 2022, we sold the Universal Buildings for $228.0 million.
(11)See "Recapitalization and Other Activity" on page 44.
(12)1700 M Street was reclassified from the operating commercial portfolio to the operating other portfolio during Q1 2022. See footnote (7) on page 23 for more information.

Graphic

Page 37


PROPERTY TABLE - MULTIFAMILY

MARCH 31, 2022
(Unaudited)

Property Table – Multifamily

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

Monthly

Monthly

Same Store (2):

Number

Total

Multifamily

Retail

Multifamily

Retail

Annualized

Rent

Rent Per

%

Q1 20212022 /

Year Built /

of

Square

Square

Square

%

%

Rent

Per

Square

Multifamily Assets

Submarket

Ownership

C/U (1)

YTD 2021 - 2022

Renovated

Units

Feet

Feet

Feet

% Leased

Occupied

Occupied

(in thousands)

Unit (3) (4)

Foot (4) (5)

National Landing

 

  

 

  

 

  

 

  

 

  

 

 

 

 

 

 

 

 

RiverHouse Apartments

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1960 / 2014

 

1,676

 

1,327,551

 

1,324,889

 

2,662

 

97.0%

95.6%

100.0%

$

33,284

$

1,727

$

2.19

The Bartlett

 

National Landing

 

100.0

%  

C

 

Y / Y

 

2016 / N/A

 

699

 

619,372

 

577,295

 

42,077

 

95.6%

91.7%

100.0%

 

21,772

 

2,627

 

3.17

220 20th Street

 

National Landing

 

100.0

%  

C

 

Y / Y

 

2009 / N/A

 

265

 

271,476

 

269,913

 

1,563

 

96.2%

92.8%

100.0%

 

7,666

 

2,578

 

2.52

2221 S. Clark Street-
Residential (6)

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1964 / 2016

 

216

 

96,948

 

96,948

 

 

87.3%

79.7%

 

4,241

 

2,052

 

4.45

DC

  

 

  

 

  

 

  

 

  

 

 

 

 

 

 

 

 

 

West Half

 

Ballpark

 

100.0

%  

C

 

Y / Y

 

2019 / N/A

 

465

 

385,368

 

343,089

 

42,279

 

91.8%

89.0%

100.0%

$

13,970

$

2,337

$

3.33

Fort Totten Square

 

Brookland/Fort Totten

 

100.0

%  

C

 

Y / Y

 

2015 / N/A

 

345

 

384,956

 

254,292

 

130,664

 

99.4%

96.8%

100.0%

9,568

1,790

2.43

The Wren

U Street/Shaw

96.0

%

C

N / N

2020 / N/A

433

332,682

289,686

42,996

92.6%

84.5%

100.0%

11,025

2,219

3.31

The Batley

Union Market/NoMa/H Street

100.0

%  

C

N / N

2019 / N/A

432

300,388

300,388

91.0%

86.3%

10,315

2,304

3.35

WestEnd25

 

West End

 

100.0

%  

C

 

Y / Y

 

2009 / N/A

 

283

 

273,264

 

273,264

 

 

97.2%

96.1%

 

11,000

 

3,370

 

3.48

F1RST Residences

 

Ballpark

 

100.0

%  

C

 

Y / Y

 

2017 / N/A

 

325

 

270,928

 

249,456

 

21,472

 

96.6%

93.8%

100.0%

 

9,794

 

2,258

 

2.95

1221 Van Street

 

Ballpark

 

100.0

%  

C

 

Y / Y

 

2018 / N/A

 

291

 

225,530

 

202,715

 

22,815

 

93.8%

91.1%

100.0%

 

8,134

 

2,160

 

3.12

901 W Street

U Street/Shaw

100.0

%  

C

Y / Y

2019 / N/A

161

154,862

135,499

19,363

89.1%

95.0%

34.3%

4,992

2,464

2.97

900 W Street (6)

U Street/Shaw

100.0

%  

C

Y / Y

2019 / N/A

95

69,183

69,183

65.3%

54.7%

2,636

4,224

5.84

North End Retail

 

U Street/Shaw

 

100.0

%  

C

 

Y / Y

 

2015 / N/A

 

 

27,355

 

 

27,355

 

91.6%

85.3%

 

1,466

 

 

The Gale Eckington

 

Union Market/NoMa/H Street

 

5.0

%  

U

 

Y / Y

 

2013/ N/A

 

603

 

466,716

 

465,516

 

1,200

 

92.1%

86.2%

100.0%

 

12,429

 

1,985

 

2.57

Atlantic Plumbing

 

U Street/Shaw

 

64.0

%  

U

 

Y / Y

 

2015 / N/A

 

310

 

245,527

 

221,788

 

23,739

 

92.6%

92.6%

77.9%

 

9,129

 

2,422

 

3.38

MD

 

  

 

  

 

  

 

  

 

  

 

 

 

 

 

 

 

 

Falkland Chase-South & West

 

Downtown Silver Spring

 

100.0

%  

C

 

Y / Y

 

1938 / 2011

 

268

 

222,754

 

222,754

 

 

99.6%

97.8%

$

5,245

$

1,668

$

2.00

Falkland Chase-North

 

Downtown Silver Spring

 

100.0

%  

C

 

Y / Y

 

1938 / 1986

 

170

 

112,143

 

112,143

 

 

98.8%

98.8%

 

2,841

 

1,409

 

2.14

Galvan

 

Rockville Pike Corridor

 

1.8

%  

U

 

Y / Y

 

2015 / N/A

 

356

 

390,293

 

295,033

 

95,260

 

97.2%

96.6%

95.5%

 

11,219

 

1,832

 

2.22

Total / Weighted Average (6)

 

  

 

  

 

  

 

  

 

  

 

7,393

 

6,177,296

 

5,703,851

 

473,445

 

95.3%

92.5%

94.4%

$

183,849

$

2,123

$

2.72

Recently Delivered

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

  

 

  

 

  

 

  

MD

8001 Woodmont

Bethesda CBD

50.0

%

U

N/N

2021 / N/A

322

363,979

344,405

19,574

56.0%

41.0%

95.1%

$

5,402

$

2,766

$

2.89

Operating - Total / Weighted Average (6)

 

  

 

  

 

  

 

  

 

7,715

 

6,541,275

 

6,048,256

 

493,019

 

93.1%

90.3%

94.5%

$

189,251

$

2,135

$

2.73

Under-Construction

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

National Landing

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

1900 Crystal Drive (7)

 

National Landing

 

C

 

  

 

  

 

808

 

633,985

 

595,315

 

38,670

2000/2001 South Bell Street (7)

National Landing

C

775

580,966

561,961

19,005

Under-Construction - Total

 

  

 

  

 

  

 

  

 

  

 

1,583

 

1,214,951

 

1,157,276

 

57,675

 

  

 

  

 

  

 

  

 

  

 

  

Total

 

  

 

  

 

  

 

  

 

  

 

9,298

 

7,756,226

 

7,205,532

 

550,694

 

  

 

  

 

  

 

  

 

  

 

  

Graphic

Page 38


PROPERTY TABLE - MULTIFAMILY

MARCH 31, 2022
(Unaudited)

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

Monthly

Monthly

Same Store (2):

Number

Total

Multifamily

Retail

Multifamily

Retail

Annualized

Rent

Rent Per

%

Q1 20212022 /

Year Built /

of

Square

Square

Square

%

%

Rent

Per

Square

Multifamily Assets

Submarket

Ownership

C/U (1)

YTD 2021 - 2022

Renovated

Units

Feet

Feet

Feet

% Leased

Occupied

Occupied

(in thousands)

Unit (3) (4)

Foot (4) (5)

Totals at JBG SMITH Share (6)

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

National Landing

2,856

2,315,347

2,269,045

46,302

96.5%

94.3%

100.0%

$

62,722

$

2,043

$

2.49

DC

3,041

2,591,784

2,271,294

320,490

94.1%

90.9%

93.7%

86,290

2,337

3.15

MD

444

341,922

340,208

1,715

99.3%

98.2%

95.5%

8,288

1,571

2.05

In-Service assets

 

  

 

  

 

  

 

  

 

  

 

6,341

 

5,249,053

 

4,880,547

 

368,507

 

95.5%

92.9%

94.5%

$

157,300

$

2,146

$

2.75

Recently Delivered assets

 

  

 

  

 

  

 

  

 

  

 

161

 

181,990

 

172,203

 

9,787

 

56.0%

41.0%

95.1%

 

2,701

 

2,766

 

2.89

Operating - Total/Weighted Average

 

  

 

  

 

  

 

  

 

6,502

 

5,431,043

 

5,052,750

 

378,294

 

94.1%

91.6%

94.5%

$

160,001

$

2,154

$

2.76

In-Service excluding newly developed and acquired assets (8)

4,557

3,922,827

3,657,252

265,575

96.7%

94.6%

97.2%

$

117,436

$

2,097

$

2.62

Under-Construction assets

 

  

 

  

 

  

 

  

 

  

 

1,583

 

1,214,951

 

1,157,276

 

57,675

 

 

  

 

  

 

  

 

  

Number of Assets and Total Square Feet/Units Reconciliation

 

Number of

At 100% Share

At JBG SMITH Share

 

 

Operating Assets

    

Assets

    

Square Feet/Units

    

Square Feet/Units

  

Q4 2021

 

22

 

7,004,869 SF/
8,208 Units

 

5,482,952 SF/
6,557 Units

Acquisitions

 

 

 

Placed into service

 

 

 

Dispositions (9)

(2)

(463,594) SF/
(493) Units

 

(51,546) SF/
(54) Units

Out-of-service adjustment

 

 

Portfolio reclassification

Building re-measurements

 

 

(363) SF/
(1) Unit

Q1 2022

 

20

 

6,541,275 SF/
7,715 Units

 

5,431,043 SF/
6,502 Units

Quarterly Rental Revenue and Occupancy Changes - Same Store Multifamily Assets

 

    

    

    

    

    

Monthly Rent Per Unit (3)

    

Multifamily % Occupied

    

Annualized Rent (in thousands)

 

Number of Assets

Number of Units

Q1 2022

Q1 2021

% Change

Q1 2022

Q1 2021

% Change

Q1 2022

Q1 2021

% Change

 

National Landing

 

3

 

2,640

$

2,043

$

2,002

 

2.0%

94.3%

94.3%

0.0%

$

61,031

$

59,797

 

2.1%

DC

8

 

2,099

2,364

2,340

 

1.0%

93.0%

81.5%

11.5%

55,401

48,053

 

15.3%

MD

 

3

 

444

 

1,571

 

1,574

 

(0.2%)

98.2%

94.1%

4.1%

 

8,222

 

7,896

 

4.1%

Total / Weighted Average

 

14

 

5,183

$

2,129

$

2,089

 

1.9%

94.1%

89.1%

5.0%

$

124,654

$

115,746

 

7.7%

Note: At JBG SMITH Share. Includes assets placed In-Service prior to January 1, 2021. Excludes North End Retail and 2221 S. Clark Street - Residential and 900 W Street as they are operated as a short-term rental property.

See footnotes on page 40.

Graphic

Page 39


PROPERTY TABLE - MULTIFAMILY

MARCH 31, 2022
(Unaudited)

Footnotes

Note: At 100% share, unless otherwise noted.

(1)"C" denotes a consolidated interest. "U" denotes an unconsolidated interest.
(2)"Y" denotes an asset as Same Store and "N" denotes an asset as Non-Same Store.
(3)Represents multifamily rent divided by occupied multifamily units; retail rent is excluded from this metric. Occupied units may differ from leased units because leased units include leases that have been signed but the tenant has not yet taken occupancy (not yet included in Percent Occupied metrics).
(4)Excludes North End Retail.
(5)Represents multifamily rent divided by occupied multifamily SF; retail rent and retail SF are excluded from this metric. Occupied multifamily square footage may differ from leased multifamily square footage because leased multifamily square footage includes space for leases that have been signed but the tenant has not yet taken occupancy (not yet included in Percent Occupied metrics).
(6)2221 S. Clark Street - Residential and 900 W Street are excluded from Percent Leased, Percent Occupied, Annualized Rent, Monthly Rent Per Unit and Monthly Rent per Square Foot metrics as they are operated as short-term rental properties.
(7)See footnotes (3) and (4) on page 41.
(8)Excludes West Half, The Wren, The Batley and 901 W Street
(9)In January 2022, The Alaire and The Terano were sold by our unconsolidated real estate venture.

Graphic

Page 40


PROPERTY TABLE – UNDER-CONSTRUCTION

MARCH 31, 2022
(Unaudited)

Property Table – Under Construction

dollars in thousands, except per square foot data

 

Schedule (1)

At JBG SMITH Share

Estimated

Estimated

Estimated

Estimated

Estimated

 

%

Square

Number of

Construction

Completion

Estimated

Historical

Incremental

Total

  

 

Asset

    

Submarket

    

Ownership

Feet

Units

Start Date

Date

Stabilization Date

    

Cost (2)

Investment

Investment

Multifamily

National Landing

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

1900 Crystal Drive (3)

 

National Landing

 

633,985

 

808

 

Q1 2021

 

Q1 2024 - Q3 2024

 

Q1 2026

$

157,212

$

264,979

$

422,191

2000/2001 South Bell Street (4)

National Landing

580,966

775

Q1 2022

Q1 2025 - Q3 2025

Q4 2026

39,425

304,010

343,435

Under-Construction - Total / Weighted Average

1,214,951

 

1,583

 

Under-Construction - Total / Weighted Average at JBG SMITH Share

1,214,951

 

1,583

 

Q3 2021

Q3 2024 - Q1 2025

Q3 2026

$

196,637

$

568,989

$

765,626

Weighted average Projected NOI Yield at JBG SMITH Share:

    

Multifamily

    

Estimated Total Investment (5)

 

5.8

%  

Estimated Incremental Investment

 

7.8

%  

Estimated Stabilized NOI at JBG SMITH Share (dollars in millions)

$

44.2


Note: At 100% share, unless otherwise noted.

(1)Average dates are weighted by JBG SMITH Share of estimated SF.
(2)Historical Cost excludes certain GAAP adjustments, interest and ground lease costs. See definition of Historical Cost on page 52.
(3)We leased the land underlying 1900 Crystal Drive to a lessee, which is constructing a multifamily asset comprising two towers with ground floor retail. The ground lessee has engaged us to be the development manager for the construction of 1900 Crystal Drive, and separately, we are the lessee in a master lease of the asset. We have an option to acquire the asset until a specified period after completion. In March 2021, the ground lessee entered into a mortgage loan collateralized by the leasehold interest with a maximum principal balance of $227.0 million and an interest rate of LIBOR plus 3.0% per annum. As of March 31, 2022, no proceeds had been received from the mortgage loan. The ground lessee was obligated to invest $17.5 million of equity funding, all of which was funded, and JBG SMITH is obligated to provide the additional project funding through a mezzanine loan to the ground lessee. We determined that 1900 Crystal Drive is a variable interest entity ("VIE") and that we are the primary beneficiary of the VIE. Accordingly, we consolidated the VIE with the lessee's ownership interest shown as "Noncontrolling interests" in our condensed consolidated balance sheets. The ground lease, the mezzanine loan and the master lease described above are eliminated in consolidation. 1900 Crystal Drive’s full cost, debt balance and other metrics are included at 100% in the at JBG SMITH Share metrics presented within this Investor Package.
(4)We leased the land underlying 2000/2001 South Bell Street to a lessee, which is constructing a multifamily asset comprising two towers with ground floor retail. The ground lessee has engaged us to be the development manager for the construction of 2000/2001 South Bell Street, and separately, we are the lessee in a master lease of the asset. We have an option to acquire the asset until a specified period after completion. In December 2021, the ground lessee entered into a mortgage loan collateralized by the leasehold interest with a maximum principal balance of $208.5 million and an interest rate of LIBOR plus 2.15% per annum. As of March 31, 2022, no proceeds had been received from the mortgage loan. The ground lessee was obligated to invest $16.0 million of equity funding, and we are obligated to provide additional project funding through a mezzanine loan to the ground lessee. As of March 31, 2022, the balance of the ground lessee's equity contribution was $12.7 million. We determined that 2000/2001 South Bell Street is a VIE and that we are the primary beneficiary of the VIE. Accordingly, we consolidated the VIE with the lessee's ownership interest shown as "Noncontrolling interests" in our condensed consolidated balance sheets. The ground lease, the mezzanine loan and the master lease described above are eliminated in consolidation. 2000/2001 South Bell Street's full cost, debt balance and other metrics are included at 100% in the at JBG SMITH Share metrics presented within this Investor Package.
(5)Historical Cost of 1900 Crystal Drive includes $22.6 million of design costs, the majority of which were incurred prior to the Formation Transaction, that are not related to the current planned development. Excluding these costs, Projected NOI Yield on Estimated Total Investment would be 6.0%.

Graphic

Page 41


PROPERTY TABLE – NEAR-TERM DEVELOPMENT

MARCH 31, 2022
(Unaudited)

Property Table – Near-Term Development

dollars in thousands, except per square foot data

 

 

Earliest

 

Potential

Estimated

At JBG SMITH Share

%

Construction

Entitlement

Estimated Potential Development Density (SF)

Number of

Historical

Asset

 

Submarket

Ownership

Start Date

Status

Total

 

Office

 

Multifamily

 

Retail

Units

Cost (1)

 

National Landing

 

  

 

 

  

 

  

 

  

 

 

  

Potomac Yard Landbay F - Block 15 - 3331 Exchange Avenue

National Landing

50.0%

2022

Fully Entitled

181,300

164,300

17,000

170

$

7,275

Potomac Yard Landbay F - Block 19 - 3330 Exchange Avenue

National Landing

50.0%

2022

Fully Entitled

238,100

214,800

23,300

240

8,814

2250 Crystal Drive

National Landing

100.0%

2023

Entitlement In Process

677,100

677,100

825

21,604

223 23rd Street

National Landing

100.0%

2023

Entitlement In Process

512,800

512,800

620

16,714

2525 Crystal Drive

National Landing

100.0%

2024

Entitlement In Process

370,000

370,000

500

12,306

101 12th Street

National Landing

100.0%

Pre-lease Dependent

Fully Entitled

239,600

234,400

5,200

10,885

DC

 

  

 

  

 

  

 

  

 

  

 

 

5 M Street Southwest

 

Ballpark

100.0%

2022

Fully Entitled

705,400

675,400

30,000

615

28,508

Gallaudet Parcel 1-3 (2)

Union Market/NoMa/H Street

 

100.0%

2023

Fully Entitled

818,000

 

 

756,400

 

61,600

 

840

19,756

Total

 

 

3,742,300

 

234,400

 

3,370,800

 

137,100

 

3,810

$

125,862

Total at JBG SMITH Share

National Landing

2,009,300

234,400

1,749,500

25,400

2,150

$

77,598

DC

1,523,400

1,431,800

91,600

1,455

48,264

3,532,700

234,400

3,181,300

117,000

3,605

$

125,862

Fully Entitled

1,972,800

234,400

1,621,400

117,000

1,660

Entitlement In Process

1,559,900

1,559,900

1,945

3,532,700

234,400

3,181,300

117,000

3,605

Held for Sale

RTC - West Trophy Office

Reston

100.0%

Pre-lease Dependent

Fully Entitled

396,000

380,000

16,000

$

8,668

Total, Including Held for Sale

 

4,138,300

 

614,400

 

3,370,800

 

153,100

 

3,810

$

134,530

Total at JBG SMITH Share, Including Held for Sale

 

3,928,700

 

614,400

 

3,181,300

 

133,000

 

3,605

$

134,530

Note: Represents select assets that have the potential to commence construction over the next three years, subject to receipt of full entitlements, completion of design and market conditions.

(1)Historical Cost includes certain intangible assets, such as option and transferable density rights values recorded as part of the Formation Transaction; and excludes certain GAAP adjustments, such as capitalized interest and ground lease costs. See definition of Historical Cost on page 52.
(2)Controlled through an option to acquire a leasehold interest. As of March 31, 2022, the weighted average remaining term for the option is 1.8 years.

Graphic

Page 42


PROPERTY TABLE – FUTURE DEVELOPMENT

MARCH 31, 2022
(Unaudited)

Property Table – Future Development

dollars in thousands, except per square foot data, at JBG SMITH Share

Estimated

Estimated

Estimated

 

 

Commercial

Estimated

Capitalized

Capitalized

Estimated

 

SF / Multifamily

Remaining

Cost of SF /

Cost of

Estimated

Total

Number of

Estimated Potential Development Density (SF)

Units to be

Historical

Acquisition

Units to Be

Ground Rent

Total

Investment

Region

 

Assets

Total

 

Office

 

Multifamily

Replaced (1)

Cost (2)

Cost (3)

Replaced (4)

Payments (5)

Investment (6)

per SF

 

Owned

VA

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

National Landing

 

7

 

4,491,500

 

1,113,000

3,378,500

 

206,186 SF

$

171,241

 

N/A

$

108,800

$

$

280,041

$

62.35

Other VA

 

2

 

145,700

 

89,700

56,000

 

21,776 SF

 

1,430

 

N/A

 

2,008

 

 

3,438

 

23.60

 

9

 

4,637,200

 

1,202,700

 

3,434,500

 

227,962 SF

$

172,671

 

N/A

$

110,808

$

$

283,479

$

61.13

DC

DC

 

5

 

852,900

 

149,600

 

703,300

 

$

70,900

 

N/A

$

$

$

70,900

$

83.13

Total / weighted average

 

14

 

5,490,100

 

1,352,300

 

4,137,800

 

227,962 SF

$

243,571

 

N/A

$

110,808

$

$

354,379

$

64.55

Optioned (7)

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

DC

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

DC

 

2

 

783,600

 

 

783,600

 

$

10,530

$

8,250

$

$

29,434

$

48,214

$

61.53

Total / Weighted Average

 

16

 

6,273,700

 

1,352,300

 

4,921,400

 

227,962 SF

$

254,101

$

8,250

$

110,808

$

29,434

$

402,593

$

64.17

Total / Weighted Average (Fully Entitled and Entitlement In Process)

13

6,051,200

1,335,700

4,715,500

227,962 SF

$

252,472

$

N/A

$

110,808

$

29,434

$

392,714

$

64.90

Entitlement Status

Fully Entitled

7

1,432,500

673,200

759,300

Entitlement In Process

6

4,618,700

662,500

3,956,200

Encumbered / Not Currently Entitling

3

222,500

16,600

205,900

Total

16

6,273,700

1,352,300

4,921,400

Held for Sale and Disposition / Recapitalization Activity

VA

National Landing (8)

 

1

 

2,082,000

 

2,082,000

 

 

$

76,686

$

N/A

$

$

$

76,686

$

36.83

Reston

 

3

 

2,140,600

 

544,800

1,595,800

 

60,426

 

N/A

60,426

28.23

Total / Weighted Average

 

4

 

4,222,600

 

2,626,800

 

1,595,800

 

$

137,112

$

N/A

$

$

$

137,112

$

32.47

Total / Weighted Average, Including Held for Sale and Disposition / Recapitalization Activity

 

20

 

10,496,300

 

3,979,100

 

6,517,200

 

227,962 SF

$

391,213

$

8,250

$

110,808

$

29,434

$

539,705

$

51.42


(1)Represents management's estimate of the total office and/or retail rentable SF and multifamily units currently included in our operating portfolio that would need to be redeveloped to access some of the Estimated Potential Development Density.
(2)Historical Cost includes certain intangible assets, such as option and transferable density rights values recorded as part of the Formation Transaction; and excludes certain GAAP adjustments, such as capitalized interest and ground lease costs. See definition of Historical Cost on page 52.
(3)Represents management's estimate of remaining deposits, option payments, and option strike prices as of March 31, 2022.
(4)Capitalized value of estimated commercial SF / multifamily units to be replaced, which generated $1.7 million of NOI for the three months ended March 31, 2022 (included in the NOI of the applicable operating segment), at a 6.0% capitalization rate.
(5)Capitalized value of stabilized annual ground rent payments associated with leasehold assets at a 5.0% capitalization rate. One optioned parcel is a leasehold interest with estimated annual stabilized ground rent payments totaling $1.5 million.
(6)Represents historical cost plus incremental costs to access the Estimated Potential Development Density, but does not include potential entitlement costs or infrastructure costs.
(7)As of March 31, 2022, the weighted average remaining term for the optioned Future Development Pipeline assets is 3.2 years.
(8)Represents the Estimated Potential Development Density that we have under contract for sale to Amazon pursuant to an executed purchase and sale agreement. Pen Place is under contract for sale to Amazon for $198.0 million, which is expected to close in Q2 2022.

Graphic

Page 43


DISPOSITION AND RECAPITALIZATION ACTIVITY

MARCH 31, 2022
(Unaudited)

Disposition Activity

dollars in thousands, at JBG SMITH Share

 

Total Square Feet/

 

Estimated Potential

 

 

Development

Ownership

Density

Gross Sales

 

Assets

Percentage

Asset Type

Location

Date Disposed

(Square Feet)

Price

 

Q1 2022

The Alaire, The Terano and 12511 Parklawn Drive

 

1.8% to 18.0%

Multifamily / Future Development

 

Rockville, MD

January 27, 2022

 

51,546 / 1,170

$

15,384

Development Parcel (1)

100.0%

Future Development

Arlington, VA

March 28, 2022

3,250

Subtotal

51,546 / 1,170

$

18,634

Q2 2022

Universal Buildings

100.0%

Commercial

Washington, DC

April 1, 2022

659,459

$

228,000

Total

 

  

 

  

 

  

 

  

 

711,005 / 1,170

$

246,634

Recapitalization and Other Activity:

In January 2022, we sold investments in equity securities for $17.8 million, resulting in a realized gain of $13.9 million.

On April 13, 2022, we formed an unconsolidated real estate venture with affiliates of Fortress Investment Group LLC ("Fortress") to recapitalize a 1.6 million square foot office portfolio and land parcels valued at $580.0 million comprising four wholly owned commercial assets (7200 Wisconsin Avenue, 1730 M Street, RTC-West/RTC-West Trophy Office/RTC-West Land and Courthouse Plaza 1 and 2), which were classified as assets held for sale as of March 31, 2022. Fortress contributed $131.0 million for a 66.5% interest in the venture. In connection with the transaction, the real estate venture obtained mortgage loans totaling $458.0 million secured by the properties, of which $402.0 million was drawn at closing. We will provide asset management, property management and leasing services to the venture. Because our interest in the venture is subordinated to a 15% preferred return to Fortress, we do not anticipate receiving any near-term cash flow distributions from it. Where noted and going forward, these assets will be excluded from the occupancy, non-GAAP financial measures and leverage metrics presented in our investor package.

On April 29, 2022, we sold a 99-year term leasehold interest in a future development asset located in Reston, VA.


Note: As of March 31, 2022, Pen Place was classified as held for sale in our condensed consolidated balance sheet. Pen Place is under contract for sale to Amazon for $198.0 million, which is expected to close in Q2 2022.

(1)One of the parcels which we acquired in December 2020 along with the future development parcel formerly occupied by the Americana Hotel.

Graphic

Page 44


DEBT SUMMARY

MARCH 31, 2022
(Unaudited)

Debt Summary

dollars in thousands, at JBG SMITH Share

    

2022

    

2023

    

2024

    

2025

    

2026

    

Thereafter

    

Total

 

 

Consolidated and Unconsolidated Principal Balance

Unsecured Debt:

Revolving credit facility ($1 billion commitment) (1)

$

$

$

$

300,000

$

$

$

300,000

Term loans ($400 million commitment)

 

 

 

200,000

 

200,000

 

 

 

400,000

Total unsecured debt

 

 

 

200,000

 

500,000

 

 

 

700,000

Secured Debt:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Consolidated principal balance

 

107,500

 

169,125

 

126,681

 

555,829

 

105,000

 

722,946

 

1,787,081

Unconsolidated principal balance

 

86,639

 

109,738

 

 

116,440

 

 

52,295

 

365,112

Total secured debt

 

194,139

 

278,863

 

126,681

 

672,269

 

105,000

 

775,241

 

2,152,193

Total Consolidated and Unconsolidated Principal Balance

$

194,139

$

278,863

$

326,681

$

1,172,269

$

105,000

$

775,241

$

2,852,193

% of total debt maturing

 

6.8

%  

 

9.8

%  

 

11.5

%  

 

41.1

%  

 

3.7

%  

 

27.1

%  

 

100.0

% 

% floating rate (2)

 

41.8

%  

 

39.4

%  

 

 

42.7

%  

 

100.0

%  

 

83.2

%  

 

50.5

%

% fixed rate (3)

 

58.2

%  

 

60.6

%  

 

100.0

%  

 

57.3

%  

 

 

16.8

%  

 

49.5

%

Weighted Average Interest Rates

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Variable rate (4)

 

2.11

%  

 

4.44

%  

 

 

1.69

%

 

1.70

%

 

2.49

%  

 

2.28

%

Fixed rate

 

3.60

%  

 

5.12

%  

 

3.06

%  

 

3.83

%  

 

 

4.29

%  

 

3.83

%

Total Weighted Average Interest Rates

 

2.97

%  

 

4.85

%  

 

3.06

%  

 

2.92

%  

 

1.70

%  

 

2.79

%  

 

3.05

%

Credit Facility

    

Revolving

    

    

    

    

Credit

Tranche A1

Tranche A2

Total/Weighted

Facility (1)

Term Loan (5)

Term Loan

Average

Credit limit

$

1,000,000

$

200,000

$

200,000

$

1,400,000

Outstanding principal balance

$

300,000

$

200,000

$

200,000

$

700,000

Letters of credit

$

467

$

$

$

467

Undrawn capacity

$

699,533

$

$

$

699,533

Interest rate spread (5)

 

1.05

%  

 

1.15

%  

 

1.15

%  

 

1.11

%  

All-In interest rate (6)

 

1.50

%  

 

2.61

%  

 

2.49

%  

 

2.10

%  

Initial maturity date

 

Jan‑25

 

Jan‑25

 

Jul‑24

 


(1)In April 2022, we repaid $210.0 million on our revolving credit facility.
(2)Floating rate debt includes floating rate loans with interest rate caps.
(3)Fixed rate debt includes floating rate loans with interest rate swaps.
(4)For floating rate loans with interest rate caps, the weighted average cap strike is 2.51% for consolidated debt, and 2.70% for all debt. The interest rate cap strike is exclusive of the credit spreads associated with the loans.
(5)The interest rate for the revolving credit facility excludes a 0.15% facility fee.
(6)The all-in interest rate is inclusive of interest rate swaps. As of March 31, 2022, we had interest rates swaps for the Tranche A-1 Term Loan and the Tranche A-2 Term Loan.

Graphic

Page 45


DEBT BY INSTRUMENT

MARCH 31, 2022
(Unaudited)

Debt by Instrument

dollars in thousands

Stated

Interest

Current

Initial

Extended

%

Principal

Interest

Rate

Annual

Maturity

Maturity

 

 

Asset

Ownership

Balance

 Rate

Hedge (1)

 

Interest Rate (2)

Date

Date (3)

 

Consolidated

2121 Crystal Drive

 

100.0

%  

$

131,535

 

5.51

%  

Fixed

 

5.51

%  

03/01/23

 

03/01/23

Falkland Chase - South & West

 

100.0

%  

 

37,590

 

3.78

%  

Fixed

 

3.78

%  

06/01/23

 

06/01/23

800 North Glebe Road

 

100.0

%  

 

107,500

 

L + 1.60

%  

Swap

 

3.60

%  

06/30/22

 

06/30/24

Credit Facility - Tranche A‑2 Term Loan

 

100.0

%  

 

200,000

 

L + 1.15

%  

Swap

 

2.49

%  

07/18/24

 

07/18/24

2101 L Street

 

100.0

%  

 

126,681

 

3.97

%  

Fixed

 

3.97

%  

08/15/24

 

08/15/24

201 12th Street S., 200 12th Street S., and 251 18th Street S.

 

100.0

%  

 

83,319

 

7.94

%  

Fixed

 

7.94

%  

01/01/25

 

01/01/25

Credit Facility - Revolving Credit Facility (4)

 

100.0

%  

 

300,000

 

L + 1.05

%  

 

1.50

%  

01/07/25

 

01/07/25

RiverHouse Apartments

 

100.0

%  

 

307,710

 

L + 1.28

%  

Swap

 

3.47

%  

04/01/25

 

04/01/25

1730 M Street (5)

 

100.0

%  

 

47,500

 

L + 1.25

%  

Swap

 

3.92

%  

12/21/25

 

12/21/25

1900 Crystal Drive (6)

L + 3.00

%  

3.45

%  

04/25/26

04/25/26

1215 S. Clark Street

100.0

%

105,000

L + 1.25

%

1.70

%  

12/22/26

12/22/26

Credit Facility - Tranche A‑1 Term Loan

 

100.0

%  

200,000

 

S + 1.15

%  

Swap

 

2.61

%  

01/14/25

 

01/14/27

2000/2001 South Bell Street (7)

L + 2.15

%

2.60

%  

01/22/27

01/22/27

4747 Bethesda Avenue

100.0

%  

175,000

S + 1.35

%  

Cap

1.65

%  

02/20/27

02/20/27

RTC - West (5)

100.0

%  

117,300

L + 1.40

%  

1.85

%  

04/22/25

04/22/27

1235 S. Clark Street

 

100.0

%  

 

78,000

 

3.94

%  

Fixed

 

3.94

%  

11/01/27

 

11/01/27

1225 S. Clark Street

 

100.0

%  

 

85,000

 

L + 1.60

%  

 

2.05

%  

07/27/28

 

07/27/28

1221 Van Street

100.0

%  

87,253

L + 2.51

%  

Cap

2.96

%  

08/01/30

08/01/30

220 20th Street

100.0

%  

80,240

L + 2.51

%  

Cap

2.96

%  

08/01/30

08/01/30

The Bartlett

100.0

%  

217,453

L + 2.51

%  

Cap

2.96

%  

08/01/30

08/01/30

Total Consolidated Principal Balance

 

 

2,487,081

 

  

 

  

 

  

 

  

 

  

Premium / (discount) recognized as a result of the Formation Transaction

 

 

581

 

  

 

  

 

  

 

  

 

  

Deferred financing costs - mortgage loans (8)

 

 

(16,772)

 

  

 

  

 

  

 

  

Deferred financing costs - credit facility (8)

 

 

(6,250)

 

  

 

  

 

  

 

  

Total Consolidated Indebtedness

$

2,464,640

 

  

 

  

 

  

 

  

Total Consolidated Indebtedness (net of premium / (discount) and deferred financing costs)

 

  

 

  

 

  

 

  

 

  

 

  

Mortgages payable

$

1,613,082

 

  

 

  

 

  

 

  

 

  

Mortgages payable classified as liabilities related to assets held for sale (5)

163,897

Revolving credit facility (4)

 

300,000

 

 

  

 

  

 

  

 

  

Deferred financing costs, net (included in other assets) (8)

 

(10,671)

 

  

 

  

 

  

 

  

 

  

Unsecured term loan

 

398,332

 

  

 

  

 

  

 

  

 

  

Total Consolidated Indebtedness

$

2,464,640

 

  

 

  

 

  

 

  

 

  

Graphic

Page 46


DEBT BY INSTRUMENT

MARCH 31, 2022
(Unaudited)

dollars in thousands

Stated

Interest

Current

Initial

Extended

 

%

Principal

Interest

Rate

Annual

Maturity

Maturity

Asset

Ownership

Balance

 Rate

Hedge (1)

 

Interest Rate (2)

Date

Date (3)

 

Unconsolidated

Atlantic Plumbing

64.0

%  

$

100,000

L + 1.50

%  

 

1.95

%  

11/08/22

11/08/22

Stonebridge at Potomac Town Center

10.0

%  

 

84,600

L + 2.50

%  

 

2.95

%  

12/10/22

12/10/22

Galvan

1.8

%  

 

89,500

L + 2.20

%  

 

2.65

%  

03/03/23

03/03/23

L’Enfant Plaza Office - North, L’Enfant Plaza Office - East, L’Enfant Plaza Retail

49.0

%  

208,984

L + 3.65

%  

Cap

 

4.61

%  

05/09/23

05/09/24

Rosslyn Gateway - North, Rosslyn Gateway - South

18.0

%  

 

47,989

L + 2.00

%  

Cap

 

2.45

%  

08/29/22

08/29/24

The Foundry

9.9

%  

 

58,000

L + 1.40

%  

Cap

 

1.85

%  

12/12/23

12/12/24

1101 17th Street

55.0

%  

 

60,000

L + 1.25

%  

Swap

 

4.13

%  

06/13/25

06/13/25

The Gale Eckington

5.0

%  

 

110,813

L + 1.60

%  

Swap

 

3.56

%  

07/31/22

07/31/25

8001 Woodmont

50.0

%  

 

104,590

4.82

%  

Fixed

 

4.82

%  

01/15/27

01/15/27

1900 N Street

55.0

%  

151,709

L + 1.70

%  

Cap

2.15

%  

04/30/25

04/30/27

Total Unconsolidated Principal Balance

 

1,016,185

 

  

 

  

 

  

 

  

Deferred financing costs

 

(4,431)

 

  

 

  

 

  

 

  

Total Unconsolidated Indebtedness

$

1,011,754

Principal Balance at JBG SMITH Share

 

 

 

  

 

  

 

  

 

  

 

  

Consolidated principal balance at JBG SMITH Share

 

$

2,487,081

 

  

 

  

 

  

 

  

 

  

Unconsolidated principal balance at JBG SMITH Share

 

365,112

 

 

  

 

 

  

 

  

Total Consolidated and Unconsolidated Principal Balance at JBG SMITH Share

$

2,852,193

 

  

 

  

 

  

 

  

 

  

Indebtedness at JBG SMITH Share (net of premium / (discount) and deferred financing costs)

 

  

 

  

 

  

 

  

 

  

Consolidated indebtedness at JBG SMITH Share

 

$

2,464,640

 

  

 

  

 

  

 

  

 

  

Unconsolidated indebtedness at JBG SMITH Share

362,861

Total Consolidated and Unconsolidated Indebtedness at JBG SMITH Share

2,827,501

Mortgages payable classified as liabilities related to assets held for sale (5)

(163,897)

Total Consolidated and Unconsolidated Indebtedness at JBG SMITH Share, Adjusted (9)

$

2,663,604


(1)For floating rate loans with interest rate caps, the weighted average cap strike is 2.51% for consolidated debt, and 2.70% for all debt. The interest rate cap strike is exclusive of the credit spreads associated with the loans.
(2)March 31, 2022 one-month LIBOR of 0.45% applied to loans, which are denoted as floating (no swap) or floating with a cap, except as otherwise noted.
(3)Represents the maturity date based on execution of all extension options. Many of these extensions are subject to lender covenant tests.
(4)In April 2022, we repaid $210.0 million on our revolving credit facility.
(5)In April 2022, the mortgages payable were repaid in connection with the acquisition of the properties by the real estate venture that we formed with Fortress.
(6)In March 2021, we leased the land associated with 1900 Crystal Drive to a lessee which will construct the asset. In March 2021, the ground lessee entered into a mortgage loan collateralized by the asset with a maximum principal balance of $227.0 million. See footnote (3) on page 41 for additional information.
(7)In December 2021, we leased the land associated with 2000/2001 South Bell Street to a lessee which will construct the asset. In December 2021, the ground lessee entered into a mortgage loan collateralized by the asset with a maximum principal balance of $208.5 million. See footnote (4) on page 41 for additional information.
(8)As of March 31, 2022, net deferred financing costs related to an unfunded mortgage loan totaling $6.1 million and the revolving credit facility totaling $4.6 million were included in "Other assets, net" in our condensed consolidated balance sheet.
(9)Excludes mortgage loans related to 1730 M Street and RTC-West, which were repaid in connection acquisition of the properties by the real estate venture that we formed with Fortress.

Graphic

Page 47


CONSOLIDATED AND UNCONSOLIDATED REAL ESTATE VENTURES

MARCH 31, 2022
(Unaudited)

Unconsolidated Real

Estate Ventures

    

Asset Type

    

City

    

Submarket

    

% Ownership

    

Total Square Feet

 

Consolidated Real Estate Ventures

MRP Realty

The Wren

 

Multifamily

 

Washington, DC

 

U Street/Shaw

 

96.0

%

332,682

Total Consolidated Real Estate Ventures

 

332,682

Unconsolidated Real Estate Ventures

 

Landmark

 

  

 

  

 

  

 

  

 

  

L’Enfant Plaza Office - East

 

Commercial

 

Washington, DC

 

Southwest

 

49.0

%  

397,855

L’Enfant Plaza Office - North

 

Commercial

 

Washington, DC

 

Southwest

 

49.0

%  

298,567

L’Enfant Plaza Retail

 

Commercial

 

Washington, DC

 

Southwest

 

49.0

%  

119,291

Rosslyn Gateway - North

 

Commercial

 

Arlington, VA

 

Rosslyn

 

18.0

%  

145,765

Rosslyn Gateway - South

 

Commercial

 

Arlington, VA

 

Rosslyn

 

18.0

%  

103,349

Galvan

 

Multifamily

 

Rockville, MD

 

Rockville Pike Corridor

 

1.8

%  

390,293

Rosslyn Gateway - South Land

 

Future Development

 

Arlington, VA

 

Rosslyn

 

18.0

%  

498,500

Rosslyn Gateway - North Land

 

Future Development

 

Arlington, VA

 

Rosslyn

 

18.0

%  

311,000

2,264,620

J.P. Morgan Global Alternatives (1)

Potomac Yard Landbay F - Block 15 - 3331 Exchange Avenue

Multifamily

Alexandria, VA

National Landing

50.0

%  

181,300

Potomac Yard Landbay F - Block 19 - 3330 Exchange Avenue

Multifamily

Alexandria, VA

National Landing

50.0

%  

238,100

Potomac Yard Landbay G

Future Development

Alexandria, VA

National Landing

50.0

%  

712,000

Potomac Yard Landbay F

Future Development

Alexandria, VA

National Landing

50.0

%  

901,000

 

2,032,400

CBREI Venture

 

  

 

  

 

  

 

  

 

  

Stonebridge at Potomac Town Center

 

Commercial

 

Woodbridge, VA

 

Prince William County

 

10.0

%  

504,327

The Foundry

 

Commercial

 

Washington, DC

 

Georgetown

 

9.9

%  

226,823

The Gale Eckington

 

Multifamily

 

Washington, DC

 

Union Market / NoMa / H Street

 

5.0

%  

466,716

Atlantic Plumbing

 

Multifamily

 

Washington, DC

 

U Street/Shaw

 

64.0

%  

245,527

 

1,443,393

Graphic

Page 48


CONSOLIDATED AND UNCONSOLIDATED REAL ESTATE VENTURES

MARCH 31, 2022
(Unaudited)

Asset Type

    

City

    

Submarket

    

% Ownership

    

Total Square Feet

Canadian Pension Plan Investment Board

 

  

 

  

 

  

 

  

 

  

1900 N Street

 

Commercial

 

Washington, DC

 

CBD

 

55.0

%  

269,501

1101 17th Street

 

Commercial

 

Washington, DC

 

CBD

 

55.0

%  

209,108

 

478,609

Bresler / Brookfield

 

  

 

  

 

  

 

  

 

  

Waterfront Station

 

Future Development

 

Washington, DC

 

Southwest

 

2.5

%  

662,600

Brandywine

 

  

 

  

 

  

 

  

 

  

1250 1st Street

 

Future Development

 

Washington, DC

 

Union Market / NoMa / H Street

 

30.0

%  

265,800

51 N Street

 

Future Development

 

Washington, DC

 

Union Market / NoMa / H Street

 

30.0

%  

177,500

50 Patterson Street

 

Future Development

 

Washington, DC

 

Union Market / NoMa / H Street

 

30.0

%  

142,200

 

585,500

Prudential Global Investment Management

 

  

 

  

 

  

 

  

 

  

Central Place Tower

 

Commercial

 

Arlington, VA

 

Rosslyn

 

50.0

%  

551,758

Berkshire Group

 

  

 

  

 

  

 

  

 

  

8001 Woodmont

 

Multifamily

 

Bethesda, MD

 

Bethesda CBD

 

50.0

%  

363,979

Total Unconsolidated Real Estate Ventures

 

 

  

 

  

 

  

 

8,382,859


Note: Total SF at 100% share.

(1)J.P. Morgan Global Alternatives is the advisor for an institutional investor.

Graphic

Page 49


DEFINITIONS

MARCH 31, 2022

Definitions

"Annualized Rent" is defined as (i) for commercial assets, or the retail component of a mixed-use asset, the in-place monthly base rent before Free Rent, plus tenant reimbursements as of March 31, 2022, multiplied by 12, and (ii) for multifamily assets, or the multifamily component of a mixed-use asset, the in-place monthly base rent before Free Rent as of March 31, 2022, multiplied by 12. Annualized Rent excludes rent from leases that have been signed but the tenant has not yet taken occupancy (not yet included in Percent Occupied metrics). The in-place monthly base rent does not take into consideration temporary rent relief arrangements.

"Annualized Rent per Square Foot" is defined as (i) for commercial assets, annualized office rent divided by occupied office square feet and annualized retail rent divided by occupied retail square feet; and (ii) for multifamily assets, monthly multifamily rent divided by occupied multifamily square feet; annualized retail rent and retail square feet are excluded from this metric. Occupied square footage may differ from leased square footage because leased square footage includes leases that have been signed but the tenant has not yet taken occupancy (not yet included in Percent Occupied metrics).

"Development Pipeline" refers to the Near-Term Development and Future Development Pipelines.

Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), EBITDA for Real Estate ("EBITDAre") and "Adjusted EBITDA" are non-GAAP financial measures. EBITDA and EBITDAre are used by management as supplemental operating performance measures, which we believe help investors and lenders meaningfully evaluate and compare our operating performance from period-to-period by removing from our operating results the impact of our capital structure (primarily interest charges from our outstanding debt and the impact of our interest rate swaps) and certain non-cash expenses (primarily depreciation and amortization on our assets). EBITDAre is computed in accordance with the definition established by Nareit. Nareit defines EBITDAre as GAAP net income (loss) adjusted to exclude interest expense, income taxes, depreciation and amortization expenses, gains and losses on sales of real estate and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, including our share of such adjustments of unconsolidated real estate ventures. These supplemental measures may help investors and lenders understand our ability to incur and service debt and to make capital expenditures. EBITDA and EBITDAre are not substitutes for net income (loss) (computed in accordance with GAAP) and may not be comparable to similarly titled measures used by other companies.

Adjusted EBITDA represents EBITDAre adjusted for items we believe are not representative of ongoing operating results, such as Transaction and Other Costs, impairment write-downs of right-of-use assets associated with leases in which we are a lessee, gain (loss) on the extinguishment of debt, earnings (losses) and distributions in excess of our investment in unconsolidated real estate ventures, lease liability adjustments, income from investments, business interruption insurance proceeds and share-based compensation expense related to the Formation Transaction and special equity awards. We believe that adjusting such items not considered part of our comparable operations, provides a meaningful measure to evaluate and compare our performance from period-to-period.

Because EBITDA, EBITDAre and Adjusted EBITDA have limitations as analytical tools, we use EBITDA, EBITDAre and Adjusted EBITDA to supplement GAAP financial measures. Additionally, we believe that users of these measures should consider EBITDA, EBITDAre and Adjusted EBITDA in conjunction with net income (loss) and other GAAP measures in understanding our operating results. A reconciliation of net income (loss) to EBITDA, EBITDAre and Adjusted EBITDA is presented on page 16.

"Estimated Incremental Investment" means management's estimate of the remaining cost to be incurred in connection with the development of an asset as of March 31, 2022, including all remaining acquisition costs, hard costs, soft costs, tenant improvements (excluding Free Rent converted to tenant improvement allowances), leasing costs and other similar costs to develop and stabilize the asset but excluding any financing costs and ground rent expenses. Actual incremental investment may differ substantially from our estimates due to numerous factors, including unanticipated expenses, delays in the estimated start and/or completion date, changes in design and other contingencies.

"Estimated Potential Development Density" reflects management's estimate of developable gross square feet based on our current business plans with respect to real estate owned or controlled as of March 31, 2022. Our current business plans may contemplate development of less than the maximum potential development density for individual assets. As market conditions change, our business plans, and therefore, the Estimated Potential Development Density, could change accordingly. Given timing, zoning requirements and other factors, we make no assurance that Estimated Potential Development Density amounts will become actual density to the extent we complete development of assets for which we have made such estimates.

Graphic

Page 50


DEFINITIONS

MARCH 31, 2022

"Estimated Total Investment" means, with respect to the development of an asset, the sum of the Historical Cost in such asset and the Estimated Incremental Investment for such asset. Actual total investment may differ substantially from our estimates due to numerous factors, including unanticipated expenses, delays in the estimated start and/or completion date, changes in design and other contingencies. For Future Development assets, Estimated Total Investment represents historical cost plus incremental costs to access the Estimated Potential Development density, but does not include potential entitlement costs or infrastructure costs.

"First-generation" is a lease on space that had been vacant for at least nine months or a lease on newly delivered space.

"Formation Transaction" refers collectively to the spin-off on July 17, 2017 of substantially all of the assets and liabilities of Vornado Realty Trust's Washington, DC segment, which operated as Vornado / Charles E. Smith, and the acquisition of the management business and certain assets and liabilities of The JBG Companies.

"Free Rent" means the amount of base rent and tenant reimbursements that are abated according to the applicable lease agreement(s).

Funds from Operations ("FFO"), "Core FFO" and Funds Available for Distribution ("FAD") are non-GAAP financial measures. FFO is computed in accordance with the definition established by Nareit in the Nareit FFO White Paper - 2018 Restatement. Nareit defines FFO as net income (loss) (computed in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, including our share of such adjustments for unconsolidated real estate ventures.

Core FFO represents FFO adjusted to exclude items (net of tax) which we believe are not representative of ongoing operating results, such as Transaction and Other Costs, impairment write-downs of right-of-use assets associated with leases in which we are a lessee, gains (or losses) on the extinguishment of debt, earnings (losses) and distributions in excess of our investment in unconsolidated real estate ventures, share-based compensation expense related to the Formation Transaction and special equity awards, lease liability adjustments, income from investments, business interruption insurance proceeds, amortization of the management contracts intangible and the mark-to-market of derivative instruments, including our share of such adjustments for unconsolidated real estate ventures.

FAD represents Core FFO less recurring tenant improvements, leasing commissions and other capital expenditures, net deferred rent activity, third-party lease liability assumption payments, recurring share-based compensation expense, accretion of acquired below-market leases, net of amortization of acquired above-market leases, amortization of debt issuance costs and other non-cash income and charges, including our share of such adjustments for unconsolidated real estate ventures. FAD is presented solely as a supplemental disclosure that management believes provides useful information as it relates to our ability to fund dividends.

We believe FFO, Core FFO and FAD are meaningful non-GAAP financial measures useful in comparing our levered operating performance from period-to-period and as compared to similar real estate companies because these non-GAAP measures exclude real estate depreciation and amortization expense and other non-comparable income and expenses, which implicitly assumes that the value of real estate diminishes predictably over time rather than fluctuating based on market conditions. FFO, Core FFO and FAD do not represent cash generated from operating activities and are not necessarily indicative of cash available to fund cash requirements and should not be considered as an alternative to net income (loss) (computed in accordance with GAAP) as a performance measure or cash flow as a liquidity measure. FFO, Core FFO and FAD may not be comparable to similarly titled measures used by other companies. A reconciliation of net income (loss) to FFO, Core FFO and FAD is presented on pages 17-18.

"Future Development Pipeline" refers to assets that are development opportunities on which we do not intend to commence construction within the next three years where we (i) own land or control the land through a ground lease or (ii) are under a long-term conditional contract to purchase, or enter into, a leasehold interest with respect to land.

Graphic

Page 51


DEFINITIONS

MARCH 31, 2022

"GAAP" means accounting principles generally accepted in the United States.

"Historical Cost" is a non-GAAP measure which includes the total Historical Cost incurred by JBG SMITH with respect to the development of an asset, including any acquisition costs, hard costs, soft costs, tenant improvements (excluding Free Rent converted to tenant improvement allowances), leasing costs and other similar costs, but excluding any financing costs and ground rent expenses incurred as of March 31, 2022.

"In-Service" refers to commercial or multifamily operating assets that are at or above 90% leased or have been operating and collecting rent for more than 12 months as of March 31, 2022.

"JBG SMITH Share" or "our share" refers to our ownership percentage of consolidated and unconsolidated assets in real estate ventures.

"Metro-Served" means locations, submarkets or assets that are within 0.5 miles of an existing or planned Metro station.

"Monthly Rent Per Unit" represents multifamily rent for the month ended March 31, 2022 divided by occupied units; retail rent is excluded from this metric.

"Near-Term Development Pipeline" refers to select assets that have the potential to commence construction over the next three years, subject to receipt of full entitlements, completion of design and market conditions.

"Net Debt" is a non-GAAP financial measurement. Net Debt represents our total consolidated and unconsolidated indebtedness less cash and cash equivalents at our share. Net Debt is an important component in the calculations of Net Debt to Annualized Adjusted EBITDA and Net Debt / total enterprise value. We believe that Net Debt is a meaningful non-GAAP financial measure useful to investors because we review Net Debt as part of the management of our overall financial flexibility, capital structure and leverage. We may utilize a considerable portion of our cash and cash equivalents at any given time for purposes other than debt reduction. In addition, cash and cash equivalents at our share may not be solely controlled by us. The deduction of cash and cash equivalents at our share from consolidated and unconsolidated indebtedness in the calculation of Net Debt, therefore, should not be understood to mean that it is available exclusively for debt reduction at any given time.

Net Operating Income ("NOI"), "Annualized NOI", "Estimated Stabilized NOI" and "Projected NOI Yield" are non-GAAP financial measures management uses to assess a segment's performance. The most directly comparable GAAP measure is net income (loss) attributable to common shareholders. We use NOI internally as a performance measure and believe NOI provides useful information to investors regarding our financial condition and results of operations because it reflects only property related revenue (which includes base rent, tenant reimbursements and other operating revenue, net of Free Rent and payments associated with assumed lease liabilities) less operating expenses and ground rent for operating leases, if applicable. NOI also excludes deferred rent, related party management fees, interest expense, and certain other non-cash adjustments, including the accretion of acquired below-market leases and the amortization of acquired above-market leases and below-market ground lease intangibles. Management uses NOI as a supplemental performance measure of our assets and believes it provides useful information to investors because it reflects only those revenue and expense items that are incurred at the asset level, excluding non-cash items. In addition, NOI is considered by many in the real estate industry to be a useful starting point for determining the value of a real estate asset or group of assets. However, because NOI excludes depreciation and amortization and captures neither the changes in the value of our assets that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of our assets, all of which have real economic effect and could materially impact the financial performance of our assets, the utility of NOI as a measure of the operating performance of our assets is limited. NOI presented by us may not be comparable to NOI reported by other REITs that define these measures differently. We believe to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with net income (loss) attributable to common shareholders as presented in our financial statements. NOI should not be considered as an alternative to net income (loss) attributable to common shareholders as an indication of our performance or to cash flows as a measure of liquidity or our ability to make distributions. Annualized NOI, for all assets except Crystal City Marriott, represents NOI for the three months ended March 31, 2022 multiplied by four. Due to seasonality in the hospitality business, Annualized NOI for Crystal City Marriott represents the trailing 12-month NOI as of March 31, 2022. Management believes Annualized NOI provides useful information in understanding our financial performance over a 12-month period, however, investors and other users are cautioned against attributing undue certainty to our calculation of Annualized NOI. Actual NOI for any 12-month period will depend on a number of factors beyond our ability to control or predict, including general capital markets and economic conditions, any bankruptcy, insolvency, default or other failure to pay rent by one or more of our tenants and the destruction of one or

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Page 52


DEFINITIONS

MARCH 31, 2022

more of our assets due to terrorist attack, natural disaster or other casualty, among others. We do not undertake any obligation to update our calculation to reflect events or circumstances occurring after the date of this earnings release. There can be no assurance that the Annualized NOI shown will reflect our actual results of operations over any 12-month period.

This Investor Package also contains management's estimate of stabilized NOI and projections of NOI yield for Under-Construction and Near-Term Development Pipeline assets, which are based on management's estimates of property-related revenue and operating expenses for each asset. These estimates are inherently uncertain and represent management's plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. The property-related revenues and operating expenses for our assets may differ materially from the estimates included in this Investor Package. Management's projections of NOI yield are not projections of our overall financial performance or cash flow, and there can be no assurance that the Projected NOI Yield set forth in this Investor Package will be achieved.

Projected NOI Yield means our Estimated Stabilized NOI reported as a percentage of (i) Estimated Total Investment and (ii) Estimated Incremental Investment. Actual initial full year stabilized NOI yield may vary from the Projected NOI Yield based on the actual incremental investment to complete the asset and its actual initial full year stabilized NOI, and there can be no assurance that we will achieve the Projected NOI Yields described in this Investor Package.

We do not provide reconciliations for non-GAAP estimates on a future basis, including Estimated Stabilized NOI and expected annualized NOI because we are unable to provide a meaningful or accurate calculation or estimate of reconciling items and the information is not available without unreasonable effort. This inability is due to the inherent difficulty of forecasting the timing and/or amounts of various items that would impact net income (loss). Additionally, no reconciliation of Projected NOI Yield to the most directly comparable GAAP measure is included in this Investor Package because we are unable to quantify certain amounts that would be required to be included in the comparable GAAP financial measures without unreasonable efforts because such data is not currently available or cannot be currently estimated with confidence. Accordingly, we believe such reconciliations would imply a degree of precision that would be confusing or misleading to investors.

"Non-Same Store" refers to all operating assets excluded from the Same Store pool.

"Percent Leased" is based on leases signed as of March 31, 2022, and is calculated as total rentable square feet less rentable square feet available for lease divided by total rentable square feet expressed as a percentage. Out-of-service square feet are excluded from this calculation.

"Percent Occupied" is based on occupied rentable square feet/units as of March 31, 2022, and is calculated as (i) for office and retail space, total rentable square feet less unoccupied square feet divided by total rentable square feet, (ii) for multifamily space, total units less unoccupied units divided by total units, expressed as a percentage. Out-of-service square feet and units are excluded from this calculation.

"Pro Rata Adjusted General and Administrative Expenses", a non-GAAP financial measure, represents general and administrative expenses adjusted for share-based compensation expense related to the Formation Transaction and special equity awards and the general and administrative expenses of our third-party asset management and real estate services business that are directly reimbursed. We believe that adjusting such items not considered part of our comparable operations provides a meaningful measure to assess our general and administrative expenses as compared to similar real estate companies and in general.

"Recently Delivered" refers to commercial and multifamily assets that are below 90% leased and have been delivered within the 12 months ended March 31, 2022.

"Same Store" refers to the pool of assets that were In-Service for the entirety of both periods being compared, except for assets for which significant redevelopment, renovation, or repositioning occurred during either of the periods being compared.

"Second-generation" is a lease on space that had been vacant for less than nine months.

"Signed But Not Yet Commenced Leases" means leases that, as of March 31, 2022, have been executed but for which rent has not commenced.

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Page 53


DEFINITIONS

MARCH 31, 2022

"Square Feet" or "SF" refers to the area that can be rented to tenants, defined as (i) for commercial assets, rentable square footage defined in the current lease and for vacant space the rentable square footage defined in the previous lease for that space, (ii) for multifamily assets, management's estimate of approximate rentable square feet, (iii) for Under-Construction assets, management's estimate of approximate rentable square feet based on current design plans as of March 31, 2022, and (iv) for Near-Term and Future Development Pipeline assets, management's estimate of developable gross square feet based on current business plans with respect to real estate owned or controlled as of March 31, 2022.

"Transaction and Other Costs" include demolition costs, integration and severance costs, pursuit costs related to other completed, potential and pursued transactions, as well as other expenses.

"Under-Construction" refers to assets that were under construction during the three months ended March 31, 2022.

.

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Page 54


APPENDIX – TRANSACTION AND OTHER COSTS

MARCH 31, 2022

  

Three Months Ended

dollars in thousands

    

Q1 2022

    

Q4 2021

    

Q3 2021

    

Q2 2021

    

Q1 2021

 

Transaction and Other Costs

 

  

 

  

  

  

  

Demolition costs

$

22

$

704

$

1,422

$

439

$

1,008

Integration and severance costs

 

145

 

422

 

154

 

222

 

240

Completed, potential and pursued transaction expenses

 

732

 

392

 

1,375

 

1,609

 

2,442

Total (1)

$

899

$

1,518

$

2,951

$

2,270

$

3,690


(1)For Q1 2022,Q4 2021 and Q1 2021, excludes $34,000, $0.6 million and $1.1 million of transaction costs attributable to noncontrolling interests.

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Page 55


APPENDIX - EBITDA, EBITDAre AND ADJUSTED EBITDA RECONCILIATIONS (NON-GAAP)

MARCH 31, 2022
(Unaudited)

Are Appendix – EBITDAAre and Adjusted EBITDA

Three Months Ended

dollars in thousands

    

Q1 2022

    

Q4 2021

    

Q3 2021

    

Q2 2021

    

Q1 2021

 

 

EBITDA, EBITDAre and Adjusted EBITDA

 

  

 

  

  

  

  

Net income (loss)

$

(77)

$

(63,334)

$

996

$

(3,318)

$

(24,069)

Depreciation and amortization expense

 

58,062

 

58,173

 

56,726

 

56,678

 

64,726

Interest expense

 

16,278

 

17,649

 

17,243

 

16,773

 

16,296

Income tax expense (benefit)

 

(471)

 

(986)

 

217

 

(5)

 

4,315

Unconsolidated real estate ventures allocated share of above adjustments

 

9,829

 

9,696

 

10,147

 

10,581

 

10,164

EBITDA attributable to noncontrolling interests

 

(26)

 

546

 

(54)

 

(41)

 

1,071

EBITDA

$

83,595

$

21,744

$

85,275

$

80,668

$

72,503

(Gain) loss on the sale of real estate

 

136

 

 

 

(11,290)

 

Gain on the sale of unconsolidated real estate assets

 

(5,243)

 

 

(23,137)

 

(5,189)

 

Real estate impairment loss (1)

25,144

Impairment related to unconsolidated real estate ventures (2)

23,883

1,380

EBITDAre

$

78,488

$

70,771

$

63,518

$

64,189

$

72,503

Transaction and Other Costs (3)

 

865

 

888

 

2,951

 

2,270

 

2,582

Business interruption insurance proceeds

(4,517)

Income from investments, net

(14,071)

(3,620)

Loss on the extinguishment of debt

 

591

 

 

 

 

Share-based compensation related to Formation Transaction and special equity awards

 

2,244

 

3,459

 

3,480

 

4,441

 

4,945

Earnings and distributions in excess of our investment in unconsolidated real estate venture

 

(441)

 

(181)

 

(280)

 

(92)

 

(330)

Lease liability adjustments

(134)

Unconsolidated real estate ventures allocated share of above adjustments

 

204

 

(497)

 

130

 

9

 

31

Adjusted EBITDA

$

67,880

$

66,169

$

69,799

$

70,817

$

79,731

Net Debt to Annualized Adjusted EBITDA (4)

9.6

x

 

9.6

x

 

7.9

x

 

7.6

x

 

6.8

x

Net Debt (at JBG SMITH Share)

    

March 31, 2022

    

December 31, 2021

    

September 30, 2021

    

June 30, 2021

    

March 31, 2021

 

Consolidated indebtedness (5)

$

2,464,640

$

2,464,927

$

2,063,426

$

1,979,494

$

1,979,208

Unconsolidated indebtedness (5)

 

362,861

 

370,743

 

362,698

 

399,262

 

401,389

Total consolidated and unconsolidated indebtedness

 

2,827,501

 

2,835,670

 

2,426,124

 

2,378,756

 

2,380,597

Less: cash and cash equivalents

 

207,568

 

282,097

 

213,612

 

217,543

 

223,142

Net Debt (at JBG SMITH Share)

$

2,619,933

$

2,553,573

$

2,212,512

$

2,161,213

$

2,157,455


Note: All EBITDA measures as shown above are attributable to OP Units.

(1)In connection with the preparation and review of our annual financial statements, we determined that certain assets were impaired and recorded impairment losses in Q4 2021 totaling $25.1 million.
(2)Includes an impairment on real estate assets taken by an unconsolidated real estate venture and an impairment of our investment in an unconsolidated real estate venture related to a decrease in the value of the underlying asset.
(3)See page 55 for the components of Transaction and Other Costs. For Q1 2022,Q4 2021 and Q1 2021, excludes $34,000, $0.6 million and $1.1 million of transaction costs attributable to noncontrolling interests.
(4)Calculated using the Net Debt below. Adjusted EBITDA is annualized by multiplying by four.
(5)Net of premium/discount and deferred financing costs.

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Page 56


APPENDIX - FFO, CORE FFO AND FAD RECONCILIATIONS (NON-GAAP)

MARCH 31, 2022
(Unaudited)

Appendix – FFO, Core FFO and FAD

    

Three Months Ended

 

 

in thousands, except per share data

    

Q1 2022

    

Q4 2021

    

Q3 2021

    

Q2 2021

    

Q1 2021

 

FFO and Core FFO

  

 

  

 

  

 

  

 

  

Net income (loss) attributable to common shareholders

$

(32)

$

(56,446)

$

893

$

(2,973)

$

(20,731)

Net income (loss) attributable to redeemable noncontrolling interests

 

10

 

(6,256)

 

103

 

(345)

 

(2,230)

Net loss attributable to noncontrolling interests

 

(55)

 

(632)

 

 

 

(1,108)

Net income (loss)

 

(77)

 

(63,334)

 

996

 

(3,318)

 

(24,069)

(Gain) loss on the sale of real estate

 

136

 

 

 

(11,290)

 

Gain on the sale of unconsolidated real estate assets

 

(5,243)

 

 

(23,137)

 

(5,189)

 

Real estate depreciation and amortization

 

55,517

 

55,902

 

54,547

 

54,475

 

62,500

Real estate impairment loss, net of tax (1)

24,301

Impairment related to unconsolidated real estate ventures (2)

23,883

1,380

Pro rata share of real estate depreciation and amortization from unconsolidated real estate ventures

 

6,870

 

6,626

 

7,002

 

7,277

 

7,311

FFO attributable to noncontrolling interests

 

(26)

 

546

 

(54)

 

(41)

 

1,071

FFO Attributable to OP Units

$

57,177

$

47,924

$

40,734

$

41,914

$

46,813

FFO attributable to redeemable noncontrolling interests

 

(5,877)

 

(4,792)

 

(4,703)

 

(4,054)

 

(4,485)

FFO Attributable to Common Shareholders

$

51,300

$

43,132

$

36,031

$

37,860

$

42,328

FFO attributable to OP Units

$

57,177

$

47,924

$

40,734

$

41,914

$

46,813

Transaction and Other Costs, net of tax (3)

 

843

 

865

 

2,928

 

2,241

 

2,552

Business interruption insurance proceeds

(4,517)

Income from investments, net

(10,538)

(2,711)

(Gain) loss from mark-to-market on derivative instruments

 

(3,367)

 

(292)

 

37

 

46

 

(133)

Loss on the extinguishment of debt

 

591

 

 

 

 

Earnings and distributions in excess of our investment in unconsolidated real estate venture

 

(441)

 

(181)

 

(280)

 

(92)

 

(330)

Share-based compensation related to Formation Transaction and special equity awards

 

2,244

 

3,459

 

3,480

 

4,441

 

4,945

Lease liability adjustments

 

 

(134)

 

 

 

Amortization of management contracts intangible, net of tax

 

1,105

 

1,073

 

1,072

 

1,073

 

1,072

Unconsolidated real estate ventures allocated share of above adjustments

 

(48)

 

(543)

 

112

 

6

 

(10)

Core FFO Attributable to OP Units

$

47,566

$

44,943

$

48,083

$

49,629

$

54,909

Core FFO attributable to redeemable noncontrolling interests

 

(4,889)

 

(4,494)

 

(5,552)

 

(4,800)

 

(5,260)

Core FFO Attributable to Common Shareholders

$

42,677

$

40,449

$

42,531

$

44,829

$

49,649

FFO per diluted common share

$

0.40

$

0.33

$

0.27

$

0.29

$

0.32

Core FFO per diluted common share

$

0.34

$

0.31

$

0.32

$

0.34

$

0.38

Weighted average shares - diluted (FFO and Core FFO)

 

126,688

 

129,009

 

131,351

 

131,485

 

131,542

See footnotes on page 58.

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Page 57


APPENDIX - FFO, CORE FFO AND FAD RECONCILIATIONS (NON-GAAP)

MARCH 31, 2022
(Unaudited)

in thousands, except per share data

    

Three Months Ended

 

    

Q1 2022

    

Q4 2021

    

Q3 2021

    

Q2 2021

    

Q1 2021

 

 

FAD

  

 

  

 

  

 

  

 

  

Core FFO attributable to OP Units

$

47,566

$

44,943

$

48,083

$

49,629

$

54,909

Recurring capital expenditures and Second-generation tenant improvements and leasing commissions (4)

 

(13,702)

 

(21,773)

 

(12,124)

 

(12,226)

 

(10,431)

Straight-line and other rent adjustments (5)

 

(1,791)

 

(2,985)

 

(3,701)

 

(4,088)

 

(4,765)

Third-party lease liability assumption payments

 

 

 

(422)

 

(703)

 

(678)

Share-based compensation expense

 

10,493

 

9,663

 

7,805

 

9,045

 

8,070

Amortization of debt issuance costs

 

1,176

 

1,142

 

1,126

 

1,096

 

1,105

Unconsolidated real estate ventures allocated share of above adjustments

 

(648)

 

(1,332)

 

(1,478)

 

(1,333)

 

(1,326)

Non-real estate depreciation and amortization

 

1,068

 

795

 

703

 

727

 

750

FAD available to OP Units (A)

$

44,162

$

30,453

$

39,992

$

42,147

$

47,634

Distributions to common shareholders and unitholders (B)

$

32,603

$

33,137

$

33,688

$

33,511

$

35,435

FAD Payout Ratio (B÷A) (6)

73.8

%

 

108.8

%  

 

84.2

%  

 

79.5

%  

 

74.4

% 

Capital Expenditures

 

  

 

  

 

  

 

  

 

  

Maintenance and recurring capital expenditures

$

4,820

$

8,121

$

7,404

$

4,376

$

3,926

Share of maintenance and recurring capital expenditures from unconsolidated real estate ventures

 

82

 

168

 

265

 

324

 

47

Second-generation tenant improvements and leasing commissions

 

8,594

 

12,815

 

3,762

 

7,454

 

6,064

Share of Second-generation tenant improvements and leasing commissions from unconsolidated real estate ventures

 

206

 

669

 

693

 

72

 

394

Recurring capital expenditures and Second-generation tenant improvements and leasing commissions

 

13,702

 

21,773

 

12,124

 

12,226

 

10,431

Non-recurring capital expenditures

 

12,810

 

15,008

 

5,885

 

4,352

 

2,836

Share of non-recurring capital expenditures from unconsolidated real estate ventures

 

12

 

145

 

177

 

56

 

51

First-generation tenant improvements and leasing commissions

 

4,450

 

6,229

 

2,603

 

1,703

 

835

Share of First-generation tenant improvements and leasing commissions from unconsolidated real estate ventures

 

473

 

987

 

93

 

199

 

1,192

Non-recurring capital expenditures

 

17,745

 

22,369

 

8,758

 

6,310

 

4,914

Total JBG SMITH Share of Capital Expenditures

$

31,447

$

44,142

$

20,882

$

18,536

$

15,345


(1)In connection with the preparation and review of our annual financial statements, we determined that certain assets were impaired and recorded impairment losses in Q4 2021 totaling $25.1 million ($24.3 million after tax).
(2)Includes an impairment on real estate assets taken by an unconsolidated real estate venture and an impairment of our investment in an unconsolidated real estate venture related to a decrease in the value of the underlying asset.
(3)See page 55 for the components of Transaction and Other Costs. For Q1 2022, Q4 2021 and Q1 2021, excludes $34,000, $0.6 million and $1.1 million of transaction costs attributable to noncontrolling interests.
(4)Includes amounts, at JBG SMITH Share, related to unconsolidated real estate ventures.
(5)Includes straight-line rent, above/below market lease amortization and lease incentive amortization.
(6)The quarterly FAD payout ratio is not necessarily indicative of an amount for the full year due to fluctuation in the timing of capital expenditures, the commencement of new leases and the seasonality of our operations.

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Page 58


APPENDIX - NOI RECONCILIATIONS (NON-GAAP)

MARCH 31, 2022
(Unaudited)

Appendix – NOI Reconciliations

in thousands

    

Three Months Ended

 

    

Q1 2022

    

Q4 2021

    

Q3 2021

    

Q2 2021

    

Q1 2021

 

 

Net income (loss) attributable to common shareholders

$

(32)

$

(56,446)

$

893

$

(2,973)

$

(20,731)

Add:

 

  

 

  

 

  

 

  

 

  

Depreciation and amortization expense

 

58,062

 

58,173

 

56,726

 

56,678

 

64,726

General and administrative expense:

 

  

 

  

 

  

 

  

 

  

Corporate and other

 

15,815

 

15,344

 

12,105

 

13,895

 

12,475

Third-party real estate services

 

27,049

 

27,124

 

25,542

 

25,557

 

28,936

Share-based compensation related to Formation Transaction and special equity awards

 

2,244

 

3,459

 

3,480

 

4,441

 

4,945

Transaction and Other Costs

 

899

 

1,518

 

2,951

 

2,270

 

3,690

Interest expense

 

16,278

 

17,649

 

17,243

 

16,773

 

16,296

Loss on the extinguishment of debt

 

591

 

 

 

 

Impairment loss

25,144

Income tax expense (benefit)

 

(471)

 

(986)

 

217

 

(5)

 

4,315

Net income (loss) attributable to redeemable noncontrolling interests

 

10

 

(6,256)

 

103

 

(345)

 

(2,230)

Net loss attributable to noncontrolling interests

(55)

(632)

(1,108)

Less:

 

  

 

  

 

  

 

  

 

  

Third-party real estate services, including reimbursements revenue

 

23,970

 

23,309

 

25,842

 

26,745

 

38,107

Other income

 

2,196

 

2,013

 

1,568

 

1,904

 

2,186

Income (loss) from unconsolidated real estate ventures, net

 

3,145

 

(25,583)

 

20,503

 

3,953

 

(943)

Interest and other income (loss), net

 

14,246

 

8,672

 

192

 

(38)

 

9

Gain (loss) on the sale of real estate

 

(136)

 

 

 

11,290

 

Consolidated NOI

 

76,969

 

75,680

 

71,155

 

72,437

 

71,955

NOI attributable to unconsolidated real estate ventures at our share

 

6,967

 

6,289

 

7,336

 

8,109

 

7,512

Non-cash rent adjustments (1)

 

(1,791)

 

(2,985)

 

(3,701)

 

(4,088)

 

(4,765)

Other adjustments (2)

 

8,760

 

6,107

 

4,683

 

5,191

 

4,738

Total adjustments

 

13,936

 

9,411

 

8,318

 

9,212

 

7,485

NOI

$

90,905

$

85,091

$

79,473

$

81,649

$

79,440

Less: out-of-service NOI loss (3)

 

(1,448)

 

(1,745)

(2,019)

(1,329)

(1,361)

Operating portfolio NOI

$

92,353

$

86,836

$

81,492

$

82,978

$

80,801


Note: NOI, Non-Same Store NOI and Same Store NOI are presented as originally reported in the respective quarter.

(1)Adjustment to exclude straight-line rent, above/below market lease amortization and lease incentive amortization.
(2)Adjustment to include other revenue and payments associated with assumed lease liabilities related to operating properties and to exclude commercial lease termination revenue and allocated corporate general and administrative expenses to operating properties.
(3)Includes the results of our Under-Construction assets and Near-Term and Future Development Pipelines.

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